Debenhams caught in icy blast from shareholders

THE cold snap wasn’t quite over for high street stalwart Debenhams at its annual general meeting yesterday as the board came under fire from beleaguered shareholders keen to know when their pockets would be padded with dividends once again.

At the company’s London-based meeting, chairman John Lovering worked hard to reassure investors that the company was making firm headway and, while it could not offer a final dividend for 2009, it was working hard to make those once again financially viable.

Lovering hailed the department store’s performance in 2009 as “extremely pleasing” and noted that it was “one of very few retailers to post profit” for the year.

Indeed, the department store reported a 0.1 per cent rise in sales targets in the 18 weeks ended 2 January, in line with internal forecasts. But the figures were adversely affected by Debenham’s decision to move space away from concessions and into own-bought merchandise.

The change in strategy cost it a 1.5 per cent drop in like-for-like sales since the start of the financial year, and shareholders wanted to know when the “drop” would be turned into a rise – along with the share price and their financial rewards.

One shareholder blasted: “You say you are proud of what you have achieved but you should not be proud of the level of debt. Investments made six years ago have not fared well and it’s obscene that you pay yourselves bonuses when we receive nothing,” to a chorus of agreement from his fellow shareholders.

Lovering, keen to appease rising tempers in his final AGM before hanging up his shoes in March, stated that the board “shared the desire to see the share price move forward.”

The subject of bonuses, while a fraught one, forced Lovering to defend his employees’ strength and argued that the efforts and hard work of his management justified the handouts and were “in the best interest of all shareholders.”