Debenhams chair Sir Ian Cheshire and chief executive Sergio Bucher have been forced from the retailer’s board by Sports Direct mogul Mike Ashley.
The extraordinary move was made at the struggling department store’s AGM today following a dismal Christmas trading update.
Two major shareholders including Sports Direct voted against the re-election of Cheshire and Bucher to the board.
Cheshire has decided to step down from his role with immediate effect as a result. Former Home Retail boss and existing Debenhams non-executive director Terry Duddy will act as interim chair.
Outside of those two major shareholders, Bucher received a 99.6% vote in favour of re-election.
The board has consequently taken the decision to continue to employ Bucher as chief executive despite him not having a seat on the board.
The business said in a statement: “The board believes that it is in the best interests of Debenhams Plc that the executive team remains fully focused on delivery of the plan.
“In the meantime, the board remains open to constructive suggestions from shareholders that are in the interests of the business as a whole. The board is committed to delivering the appropriate capital structure to ensure a sustainable and profitable future for all stakeholders.”
Ashley, who swooped on House of Fraser, buying it out of administration for £90m in August, has long held designs on Debenhams. He has previously spoken publicly of his desire for the two department store chains to work together.
He owns a 29% stake in the business, just shy of the threshold at which he would need to make a formal takeover bid and worked with another major shareholder, Dubai-based Landmark, to pull off the coup.
Debenhams has long struggled amid a torrid department store market. Last year, the business was forced to issue three profit warnings and today reported a dismal set of Christmas figures.
The department store business said like for likes fell 3.4% in the six weeks to January 5 and 5.7% across the wider 18-week period. Gross transaction values dropped 3.8% during the six-week period and 5.6% across the 18 weeks.
Duddy said: “I recognise that individual shareholders have wished to register their dissatisfaction. I would like to thank Ian for his strong leadership of the board and his contribution to the business. We wish him all the best for the future. I am looking forward to working with Sergio. My first task is to meet with shareholders so that I understand any concerns that they may have.”