Debenhams's share price rises as chief executive Michael Sharp formally resigns - but there's no sign of a successor just yet

 
Catherine Neilan
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Boxing Day Sales in London
Debenhams boss Michael Sharp has been at the helm since 2011 (Source: Getty)

Debenhams' share price climbed 3.4 per cent this morning as it revealed half-year growth while confirming it is "well advanced" in finding a new chief executive.

Michael Sharp today submitted his resignation to the board, Debenhams said. It was originally announced that he planned to step down in October last year, but today's move takes that process one step closer.

Debenhams said it was "well advanced" in finding a successor for Sharp, who has been at the helm for five years, but was not in a position to announce an individual at this stage.

Sharp will continue in the role until that has been confirmed "to ensure an orderly and smooth handover".

He said: "It has been a privilege to lead Debenhams and I am very proud of our achievements since September 2011.

"I believe Debenhams is now capable of competing in the ever changing and challenging world of multi-channel retailing. We have a strong and talented management team and I would like to thank them and our 30,000 colleagues for their continuing support, hard work and passion."

Chairman Sir Ian Cheshire, Chairman added: "On behalf of the board, I would like to thank Michael for his service as chief executive of Debenhams. He has led the business through an unprecedented period of change for the sector, leaving the business in good shape for the future as today's results demonstrate. The foundations to deliver sustainable growth are in place."

But not everyone will agree that Sharp has done all he could for the department store business, which has lagged behind others such as John Lewis and House of Fraser in performance and struggled with excessive promotional activity, which has driven away both brands and customers.

Russ Mould, investment director at AJ Bell, said Sharp's successor would have "a big job on his or her hands if they are to return the firm to past profit glories and fully repair the damage done to margins by a reliance on blue-cross sales days".

“Sharp has worked hard to wean the company off heavy discounting, emphasising full-price sales and better stock control, while also looking to enhance Debenhams’ online service. However, for all of the effort behind the strategic review he unveiled five years ago, the long-term trend in Debenhams profits and operating margin remains discouraging.”

However, Debenhams has begun to turn a corner in performance, this morning revealing sales were up 1.6 per cent to £1.63bn for the 26 weeks to 27 February. Group like-for-likes rose 2.4 per cent on a constant currency basis.

Group profit before tax climbed 5.5 per cent to £93.8m, with basic earnings per share up 5.1 per cent to 6.2p.

Gross margins were up 20 basis points.

Group Ebitda was up 1.3 per cent to £153m, with UK Ebitda rising three per cent to £125.5m. However international EBITDA declined 5.8 per cent to £27.5m because of adverse currency movements.

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