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, on Thursday 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.
Debenhams recently embarked on a strategic shift, including the shuttering of 50 outlets and the launch of a new store design concept.