10th Jan 2019 17:32
LONDON (Alliance News) - Debenhams PLC said Thursday "two major shareholders" voted against the re-election of Chair Ian Cheshire and Chief Executive Sergio Bucher to the company's board at its annual general meeting.
Shares in Debenhams closed down 15% at 4.82 pence each. In the past 12 months, the embattled retailer's share price has shed 83%.
As a result, Cheshire will step down from his role, deciding it "is no longer possible for him to remain chair". Senior Independent Director Terry Duddy will be appointed interim chair with immediate effect.
Cheshire said: "It has been a great privilege to get to know my Debenhams colleagues over the past three years. In unprecedented market conditions the team has worked incredibly hard to build a format for the future and a comprehensive plan to reshape the business, which will put Debenhams on the road to recovery and future success. Whilst it is right that I step down today, I wish the team at Debenhams every success in the future."
Meanwhile, Bucher will continue in his chief executive role but will now report to the board. Debenhams said it has "full confidence in Sergio and in the management's plan to reshape the business".
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."
Duddy added: "My first task is to meet with shareholders so that I understand any concerns that they may have."
Over 56% of the votes cast at the AGM voted against the re-election of Cheshire and Bucher. Excluding "two major shareholders" over 99% of the votes cast were in favour of Bucher being re-elected to the board.
Debenhams major shareholders include Sports Direct International PLC, with nearly a 30% stake, Brandes Investment Partners Inc, with over 12% stake, Schroders PLC, with a 9.8% stake, and Milestone Resources Group Ltd, which holds a 7.3% stake.
Only 67% of all Debenhams' issued share capital voted in the two resolutions.
Every director up for re-election received over 11% of votes against their re-election.
The company said: "The board believes that it is in the best interests of Debenhams 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."
Earlier Thursday, Debenhams announced it is in talks with lenders over its financing amid weak store footfall over the Christmas period.
Like-for-like sales for the six weeks to January 5 fell 3.4%. In the UK, like-for-like sales declined 3.6%, and Debenhams said digital growth offset "weak" footfall in its stores. In the period, gross transaction value fell 3.8%.
Debenhams' like-for-like sales fell 5.7% in the 18 weeks to January 5, with UK sales down 6.2% and International falling 3.5%. Digital sales were up 4.6%.
"The UK trading environment has continued to be volatile, as expected, with clear evidence our customers have been seeking out promotions," the company said.
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