Casualties are beginning to mount after a challenging holiday in the United Kingdom.
The board of Debenhams plc voted Thursday to remove chairman Sir Ian Cheshire and CEO Sergio Bucher from their seats on the board in the wake of disappointing holiday financials, the UK department store retailer said in a statement. Bucher will retain his position as CEO.
The board resolution that would have kept Cheshire on the board was defeated 43 percent to 57 percent and a similar margin kept Bucher from retaining his spot, as well. Cheshire voluntarily stepped down as chairman after the vote at Debenham’s annual general meeting.
The former chairman hired Bucher as CEO when he joined the company three years ago and the vote reflected the duo’s tight professional bond.
“The board is mindful of its responsibilities to all shareholders and has full confidence in Sergio and in the management’s plan to reshape the business,” Debenhams said in a statement on the decision. “As a result, the board and Sergio have agreed that he should continue as CEO of Debenhams plc, reporting to the board.”
Cheshire called his time with Debenhams “a great privilege” and wished his colleagues well. However, he quickly pointed to the lackluster consumer shopping landscape in the U.K. as one of the primary causes of the trouble at Debenhams.
“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,” Cheshire said in a statement. “Whilst it is right that I step down today, I wish the team at Debenhams every success in the future.”
Mike Ashley, billionaire owner of Sports Direct and holder of roughly 30 percent of all Debenhams shares, was likely the driving force behind the board shake-up, according to Britain’s The Guardian. He has been critical of U.K. retail practices in the past, saying that the sector has “already died” and that the retail environment there would need a “massive electric shock” to return the high street to profitability.
Related Stories
The postmortem for Debenhams, in particular, will likely begin with its sliding sales. The retailer reported that comparable holiday sales were down 6.2 percent in the U.K. and 3.5 percent internationally. Following a trend seen in other U.K. retailers, Debenhams did report that its online sales had ticked up 3.8 percent but that was clearly not enough to save the trading period—or Cheshire’s job.
As the retailer searches for a replacement, Terry Duddy, Debenhams’ senior independent director, will assume the mantle of interim chairman. Duddy said he recognized the “dissatisfaction” that shareholders expressed with their votes on Thursday and that his first order of business will be to meet with those shareholders and work to understand their concerns.
Debenhams previously announced in October plans to close up to 50 stores over the next three to five years, and its most recent financial results admits that it will likely have to find cost savings of another 30 million pounds ($38.53 million) in order to meet previous profit guidance.