Debenhams chief executive Michael Sharp has revealed plans to stand down next year, but why has he decided to unveil the news now?

The department store group’s boss has signalled his intent to quit the retailer “some time” in 2016.

It has been no secret that Sharp has faced pressure from institutional investors after some poor results at Debenhams. Stockbrokers Cenkos have reportedly been trying to oust Sharp and chairman Nigel Northridge. And key investors – Milestone Resources, Schroders and Old Mutual –  are believed to have teamed up with the stockbroking firm. 

But things are on the up for Sharp, so why go now?   

“There’s only so long you can do jobs like this for, as they are very intense,” he explained to journalists, hinting at the demands of satisfying shareholders.

Sharp became chief executive in 2011 and yesterday he stressed he has always been “committed” to staying at the retailer for five years. When pushed on whether the board were aware of his plans, Sharp said: “It’s a conversation that I’ve always had with the chairman and the board. It’s never been public because that’s something for me to discuss with the board.”

Going out on a high

He dismissed the notion his departure could be unsettling for Debenhams and its 30,000 staff. “It’s not destabilising, it’s more important that my intentions are clear as it puts an end to speculation,” he said.

Sharp will not budge on the five-year plan. “Although it’s very tempting to consider to go beyond my original plan, it’s time for me to stick to what I said I would originally do,” he said.

The reason it might be tempting to stay is because Debenhams’ fortunes have begun to improve after a rocky few years. Yesterday’s full-year results showed a 7.1% lift in profits, following a 21% drop last year. Sharp has overseen of cutting down on the number of promotion days, boosting its fulfilment offer and its international business.

“It’s quite clear the strategy is working,” said Sharp. “There’s no doubt about that as witnessed by the results.”

Perhaps Sharp thinks he would like to go out on a high, having helped turn around the group.

Meanwhile, analysts were mixed in their reaction. Peel Hunt’s John Stevenson said the management “uncertainty” risked leaving the shares in “limbo”. However N+1 Singer analyst Matthew McEachran said by the time Sharp goes the “strategic initiatives should be bedded in well enough to avoid disrupting progress”.