Debenhams chief executive Michael Sharp to step down in 2016

Published: Thursday 22nd October 2015 by The News Editor

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Department store chain Debenhams said chief executive Michael Sharp is to bow out in 2016 after nearly five years at the helm.

The group said Mr Sharp will remain in the role throughout the key Christmas trading season, but plans to step down “some time in 2016” after helping find his successor.

Details of his planned departure came as the retailer reported its latest set of figures showing a 7.3% rise in full-year pre-tax profits to £113.5 million.

Mr Sharp, who became chief executive in September 2011, said he had always intended to serve a five-year term at the retailer.

But there have been mounting rumours over his tenure, with Mr Sharp under increasing pressure in recent years to turn the firm’s fortunes around.

He said: “I accepted the job of chief executive with the intention of spending five years in the role and although it will be difficult to leave a fabulous company like Debenhams, now is the right time for the board to begin the process of identifying my successor.”

He added: “I hope being transparent about my intentions will stop recent speculation becoming a distraction, allowing me and the Debenhams team to focus on delivering our strategy and the important Christmas trading period.”

The outgoing boss said he was “proud of our achievements since September 2011” and believes Debenhams is “now capable of competing in the ever changing and challenging world of multi-channel retailing”.

Results showed like-for-like sales rose 2.1% over the year to August 29, with currency movements stripped out, or 0.6% higher on a reported basis.

The group said i t made an “encouraging start to the new financial year and is in good shape for the crucial Christmas trading period”.

Reports last month suggested some of the major investors in Debenhams were unhappy with its performance and were seeking a board shake up.

Debenhams, which has 161 UK stores out of 248 internationally, has struggled in recent years to keep pace with the likes of House of Fraser and resurgent rival Marks & Spencer, with one retail expert recently saying it had “clearly lost its way”.

But chairman Nigel Northridge paid tribute to Mr Sharp and said the latest figures showed his turnaround efforts were paying off.

He said: ” I would like to thank Michael for continuing to lead Debenhams through a crucial time of change in retailing and for the good progress the company has made under his leadership.

“He has worked enormously hard to develop the company’s strategy and the benefits of this are really starting to show in the results.”

Debenhams has been refreshing its ranges, cutting back on sale days and launching more concessions at its stores to revive sales.

It said it reduced sale days by 17 days over the year, bringing the total cut out to 42 since spring 2014.

Results showed UK like-for-like store sales fell 0.3% over the full-year, although this was offset by a 1.3% rise in like-for-like online trade as it boosted its web and mobile app offer.

International like-for-like sales lifted 1.1%, including an 8.1% surge for its Magasin du Nord chain.

The group plans to take part in the Black Friday discount day this year after trading “successfully and profitably” on the day before last Christmas.

It also confirmed an expected hit from the incoming national living wage, estimating it will cost it an extra £3 million in the new financial year and £8 million the following year.

Debenhams cautioned the market remains competitive, but Mr Sharp said the group was in “excellent shape” for Christmas.

Published: Thursday 22nd October 2015 by The News Editor

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