Ashley leads board revolt
Debenhams chairman forced to quit after vote
SPORTS Direct tycoon Mike Ashley’s battle for Debenhams took a dramatic turn last night after the chain’s chairman was forced to quit and its boss was ousted from the board.
The billionaire led a shareholder revolt, hours after Debenhams announced it had begun talks with banks to boost its finances.
Debenhams’ chairman Sir Ian Cheshire stepped down with immediate effect after 56% of shareholders voted against him staying.
The rebellion was led by Sports Direct which controls nearly 30% of Debenhams, and the Dubai-based Landmark Group.
Landmark’s owner is Indian billionaire Mukesh “Micky” Jagtiani.
The pair also blocked chief executive Sergio Bucher from remaining on the board.
Bucher agreed to stay on, although it is unclear for how long.
Terry Duddy, Debenhams’ senior independent director, was named interim chairman.
The extraordinary events came after Debenhams said it had begun
“constructive discussions” with its lenders and was looking to bring in “new sources of funding.”
Ashley is believed to be angry that Debenhams snubbed a £40million loan offer last month.
Insiders say yesterday’s boardroom coup was Ashley – fresh from buying stricken House of Fraser – trying to prevent the firm getting money from elsewhere which may weaken his hand.
Yesterday also saw Debenhams warned of more job losses after earmarking another £30million of cost cuts. The firm revealed a 3.4% slump in UK sales since the start of December, and a 6.2% drop in the past 18 weeks. Despite that, Debenhams stuck to City forecasts that it would make around £8m profit in its current financial year.
The firm has already earmarked 50 store closures.
Debenhams’ share price crashed another 14% yesterday to less than 5p. It left it with a stock market value of just over £60m, when it has £285m of debt.
Laith Khalaf, senior analyst at brokers Hargreaves Lansdown called the results “dismal”.