Shares in struggling department store chain Debenhams crashed 18 per cent to 3.9p today following yesterday’s shock Mike Ashley-inspired annual general meeting coup.
Sports Direct boss and major Debenhams shareholder Ashley blocked the re-appointment of the company’s chairman and chief executive to the board at yesterday’s AGM.
Sir Ian Cheshire, chair of the retailer’s board since 2016, said he would step down, replaced on an interim basis by Teddy Duddy, Debenhams' senior independent director.
Chief executive Sergio Bucher, will remain in his role, despite his ejection from the retailer’s board.
The board said it had “full confidence in Sergio and in the management’s plan to reshape the business”.
Debenhams’ shares closed down over 14 per cent yesterday, after it reported a 3.4 per cent sales drop over the holiday period. It has had a disastrous spell in recent years, with its stock falling by around 90 per cent amid multiple profit warnings. It is undertaking a series of store closures in an effort to cut costs.
Ashley – who holds just under 30 per of Debenhams’ shares – had made his growing frustration with the department store clear, which he said last month had refused to accept a £40m loan offer. He said the firm’s intransigence “makes you want to blow your brains out.”.
Sports Direct was joined by Landmark, another major shareholder, in voting against the re-appointments.
Suzy Ross, senior advisor at Accenture Retail said: “Debenhams is a cautionary reminder of the criticality of the right leadership and the right set of priorities to lead in these challenging times. Retailers who combine the fundamentals of traditional retail while harnessing the power of customer analytics and new technologies are the ones with a competitive advantage.”
Further reading: Retail sector suffers worst Christmas in a decade as sales stagnate