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Debenhams 8217 chief executive to step down

Article By: ,  Financial Analyst
October 22, 2015 6:36 PM

Debenhams has confirmed that chief executive Michael Sharp will step down in 2016, after five years in the role.

The news comes after reports last month that several of Debenhams' biggest investors were unhappy with the retailer's performance – and were calling for a shake-up of the board.

However, the company says that Mr Sharp's upcoming departure was because he had always planned to serve a five-year term.

Mr Sharp said he hoped the announcement would put an end to recent speculation.

"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 explained.

Increasing pressure

Mr Sharp has worked for the company – Debenhams and its predecessor the Burton Group – for 30 years. He became chief executive in 2011.

He has recently been under increasing pressure to find solutions for the company's difficulties and there have been many rumours over how long he could remain in the position.

During his tenure, Mr Sharp has reduced the number of promotions. He has also worked to strengthen online ordering and delivery options, while concessions in under-used store space have been added in a bid to increase shopper numbers.

In addition, the firm's international presence has been increased.

Despite these strategies, Debenhams has seen little sales or profit growth in recent years. Shares have been up by around a third over the last year – at around 81 pence – but they are well below the peak reached in November 2012 of 124 pence.

Recent financial reports indicated that the company's full-year profit before tax was up 7.3 per cent to £113.5 million.

Mr Sharp will remain in his current post through the busy Christmas trading period. 

Following the announcement on Thursday (October 22nd), shares in Debenhams rose about four per cent in early trading.

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