Debenhams chairman ousted in board coup
Written by Peter Walker
A shareholder revolt has led to the removal of chairman Ian Cheshire and chief executive Sergio Bucher from the Debenhams board, although the latter retained his place at the head of the department store chain.
The coup at the retailer’s AGM was spurred on by two major shareholders, one of which is Mike Ashley’s Sports Direct.
Cheshire, who joined the board in January 2016 and was appointed chairman the following April, was forced to step down after shareholders voted against his re-election. He subsequently announced his resignation with immediate effect, and Debenhams’ senior independent director Terry Duddy was appointed as interim chairman.
Bucher was also not re-elected to the board, principally as a result of the votes of the same two major shareholders, one of which is Ashley.
While he received 44.15 per cent of votes in favour of re-election, excluding those two major shareholders, the vote for him to continue on the board was approximately 99.6 per cent in favour. As a result, the board agreed that Bucher should continue as chief executive.
“I recognise that individual shareholders have wished to register their dissatisfaction,” Duddy said in a statement. “My first task is to meet with shareholders so that I understand any concerns that they may have.”
Cheshire said: “In unprecedented market conditions the team has worked incredibly hard to build a format for the future and a comprehensive plan to reshape the business, which will put Debenhams on the road to recovery and future success.
“Whilst it is right that I step down today, I wish the team at Debenhams every success in the future,” he added.
Cheshire’s resignation comes after he issued Ashley with an ultimatum last month to make an official offer to take over Debenhams or stay out of its affairs.
Ashley, who owns a 29.7 per cent stake in Debenhams through Sports Direct, had criticised the department store for rejecting his £40 million interest-free loan offer in exchange for more shares.
The changes followed weak trading figures for the crucial Christmas period, with gross transactions down 3.8 per cent in the six-week period to 5 January, with like for like sales down 3.4 per cent on 2017.
Over the course of 2018, the retailer endured several profit warnings and its end-of-year report in October saw a loss before tax of £491 million – a record in its 240-year history.