Debenhams chairman resigns and CEO voted off board after plunge in sales
10 January 2019, 18:28 | Updated: 10 January 2019, 20:31
Debenhams chairman Sir Ian Cheshire has stepped down after another plunge in sales left the department store chain fighting for its survival.
In the post for three years, Sir Ian informed the troubled retailer of his decision to go at a board meeting following the company's AGM on Thursday.
According to Debenhams, Sir Ian resigned after two members of the board voted against his re-election.
It is understood that Mike Ashley's Sports Direct and Dubai-based Landmark Group, which collectively hold about 38% of Debenhams's shares, voted against Sir Ian remaining on the board.
Sports Direct's stake in Debenhams is just under 30%.
Sir Ian's resignation came the same day that Debenhams announced poor sales over the Christmas period, but not as dismal as had been anticipated by the industry at large.
The department store chain saw gross transactions fall 3.8% in the six weeks to 5 January.
Comparable sales in the UK were 3.6% lower than last year, due to weak store footfall that also affected other high street retailers.
Amid the challenges facing Debenhams, chief executive Sergio Bucher also failed to be re-elected to the board, after two major shareholders voted against him at the general meeting.
However, the board and Mr Bucher agreed that he should continue as CEO and report to the board, Debenhams said.
Sir Ian steps down as chairman with immediate effect, one day after Sky News reported that Debenhams investors had drafted in a team of City advisers ahead of restructuring to underpin the department store chain's future.
He said in a statement: "It has been a great privilege to get to know my Debenhams colleagues over the past three years.
"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."
Debenhams's senior independent director, Terry Duddy, has been appointed interim chairman with immediate effect.
He said: "I recognise that individual shareholders have wished to register their dissatisfaction.
"I would like to thank Ian for his strong leadership of the board and his contribution to the business.
"We wish him all the best for the future."
Mr Duddy added that his first task as interim chairman would be to meet shareholders "to understand any concerns that they may have."
Debenhams is currently on a desperate quest to drive down costs, and central to this is a plan to extend previously announced store closures from 10 to a possible 50 sites over the next three to five years.
The chain is in discussions with landlords, and as many as 4,000 of the company's 27,000-strong workforce are likely to be lost as a result of the closure proposals.
Debenhams is also expected to consider company voluntary arrangements (CVAs) - a provision that allowed retailers and casual dining chains last year to close down under-performing locations.
(c) Sky News 2019: Debenhams chairman resigns and CEO voted off board after plunge in sales