Retail

Ashley pushes Debenhams chair and CEO off board


Mike Ashley, the Sports Direct chief executive, has pushed the chairman and chief executive off the board of Debenhams by voting against their reappointment at the company’s annual meeting on Thursday.

Terry Duddy, the senior independent director, will become interim chairman, replacing Ian Cheshire. Former Amazon executive Sergio Bucher will continue to run the company for the time being, but will not sit on the board.

The dramatic development comes after growing frustration on the part of Sports Direct, which has a 29 per cent stake in Debenhams, at the management of the department store group. Landmark, another substantial shareholder, also voted against the reappointments.

At the time of Sport Direct’s own interim results in December, Mr Ashley revealed he had offered to lend the struggling department store group £40m to help it refinance itself, and said its refusal to engage “makes you want to blow your brains out”. However, Sports Direct has no board representation at the company, and accounts for Debenhams as an investment rather than associate.

Sir Ian became chairman in April 2016, having previously been chief executive of DIY conglomerate Kingfisher. He was joined by Mr Bucher later that year.

Since then, the stock has lost roughly 90 per cent of its value amid a series of profit warnings, and pre-tax profit has fallen from more than £100m to £32m last year.

A new strategy, termed Redesigning Debenhams, was launched in April 2017, aiming to increase digital sales, close underperforming stores and reduce reliance on price promotions.

However, a downturn in consumer sentiment after the Brexit referendum and a rapid shift of shopping online left the company fighting for its future.

“Their operational gearing was a problem, in that they started with low profitability,” said one analyst who follows the company. “However, I don’t think he [Bucher] was especially engaged by the magnitude of the problem until recently.”

Another corporate adviser said other investors had been losing faith in the company. “But they don’t seem to know quite what to do. It is like watching a car crash in slow motion.”



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.