Debenhams chairman ousted and CEO made to step down
MIKE Ashley has forced the chairman of Debenhams to resign and the retailer’s chief executive to step down from the board as the Sports Direct tycoon flexed his muscles at the firm’s annual meeting.
The news comes hours after the struggling department store unveiled declining sales over Christmas, but said it was still on track to deliver on profit expectations.
Sir Ian Cheshire was ousted from the board after Mr Ashley’s Sports Direct and Dubai-based Landmark Group, which collectively hold about 38% of Debenhams’s shares, voted against his re-election to the board.
Sports Direct’s stake alone in Debenhams is just under 30%.
Sergio Bucher is to stay on as chief executive, reporting to the board and will to continue to execute the company’s plan to re-shape the business.
The company said it is in the “best interests of Debenhams plc that the executive team remains fully focused on delivery of the plan”.
It said that the company is “open to constructive suggestions from shareholders that are in the interests of the business” and it is “committed to delivering the appropriate capital structure to ensure a sustainable and profitable future for all stakeholders”.
Terry Duddy, Debenhams’ senior independent director, who has been appointed interim chairman, said that he recognises that “individual shareholders have wished to register their dissatisfaction” and that his “first task is to meet with shareholders so that I understand any concerns that they may have”.
At the shareholder meeting Mr Bucher received 44% votes in favour of his re-election and, excluding Sports Direct and Landmark, the vote for him to continue on the board was about 99.6% in favour.
Earlier, yesterday Debenhams said like-for-like sales dipped by 3.4% in the six weeks to January 5, weighed down by the UK where sales were 3.6% lower due to weaker footfall.
But it had defied predictions from the City that it would issue a profit warning over the period.
CHRISTMAS trading figures for many of the big high street retailers are out, and there are more losers than winners.
The British Retail Consortium has said that retail sales in December were flat as UK businesses experienced their worst Christmas in a decade.
A combination of falling consumer confidence in the face of Brexit uncertainty and soaring costs are hitting the sector hard.
It comes as a number of major retailers announced their trading updates yesterday.
Struggling department store Debenhams has reported a fall in sales, as have Marks and Spencer and Sainsbury’s.
John Lewis saw a small rise in profits but warned the annual staff bonus is under threat. ■
The supermarket chain was a festive winner as it reported a 2.2% rise in UK like-for-like sales over the festive period as the supermarket unveiled Christmas trading figures.
It outperformed the wider market in all key categories - food, clothing and general merchandise.
Promotions on lamb and beef joints also helped drive sales.
Chief executive Dave Lewis said: “As a team we have achieved a lot in the last 19 weeks. In the UK we delivered significant improvements in our competitive offer and this is reflected in a very strong Christmas performance which was ahead of the market.”
Unveiling its best set of Christmas trading figures in nearly a decade, the UK’s biggest retailer said promotions on festive staples including vegetables and meat helped to drive sales. The grocery giant posted a 2.2% rise in UK like-for-like sales in the six weeks to January 5, outperforming the wider market in all key categories - food, clothing and general merchandise. ■ Morrisons
Although the supermarket’s growth in retail sales was slower than the previous year, additional wholesale contracts helped to boost overall like-for-like sales by 3.6%. Sales of the retailer’s “wonky veg” range doubled but premium products were slower to shift. ■
Snapping at the heels of the big supermarkets, discounters Aldi and Lidl continued to attract new shoppers. Two thirds of British shoppers visited one of the retailers during the seasonal period and Aldi reported its best ever week in the UK as sales rose 10%.
The week commencing 17 December was Aldi’s busiest-ever in the UK, with sales over 10% higher than the previous year.
Aldi says strong sales performance was driven by a surge in demand for its premium Specially Selected and Exquisite lines. ■
Even before the publicity surrounding the vegan sausage roll, the bakery had had a bumper December.
Trading was so strong that it prompted Greggs to raise its 2018 profits guidance for the second time in two months.
In the fourth quarter overall, likefor-like sales were up 5.2%.
And 2019 has got off to a really strong start with the vegan sausage rolls selling well. ■ Next
Fashion and home retailer Next may have seen high street store sales slump by 9.2% over Christmas, but this was offset by a 15.2% surge online. However the business anticipates tough times ahead and has cut its annual profit forecast to £723m, compared to the £727m previously expected. ■
Consumers were seemingly unperturbed by allegations of harassment against the fashion brand’s founder Ray Kelvin. Christmas sales increased by 12.2%, with particularly strong digital growth of 18.7%. Mr Kelvin has stepped back from his position as CEO while an external investigation takes place. ■
The biggest loser was undoubtedly music retailer HMV, which became the first high street casualty after Christmas as it collapsed into administration, endangering thousands of jobs. It is the second time HMV has collapsed in recent years, having filed for administration in 2013, after which it was acquired by its current owner, Hilco. High business rates, weak consumer confidence and the rise of online streaming services all took their toll. ■
John Lewis’ 83,000 staff would have had the stuffing knocked out of them when they read the company’s festive trading update, as it warned the annual bonus is under threat for the first time since 1953 as it battles challenging trading conditions. The retailer also expects profits to be “substantially lower” this year amid slower sales growth, meaning the bonus could be axed. Over Christmas, the department store chain booked like-for-like sales growth of just 1%, while sister chain Waitrose saw only 0.3% growth. ■
Marks & Spencer recorded slides in