It’s a dog-eat-dog world out there in retail, what with the onward march of ecommerce and increasing upheaval on the high street. So it’s not exactly surprising Debenhams boss Michael Sharp is stepping down after a turbulent five years at the helm.
He claimed he had always planned to leave after five years even though he’d never said so publicly. But an FT report last month indicated 20 of the department store’s shareholders (not including Sports Director owner Mike Ashley) had asked broker Cenkos to find out if others felt the same about pushing for a change of leadership.
‘I accepted the job of Chief Executive with the intention of spending five years in the role,’ Sharp, who has been at the retailer for 25 years, said. ‘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.’
Debenhams also announced a decent set of annual results today, with pre-tax profit up 7.3% to £113.5m in the year to August 29, slightly above analysts’ estimates. Sales edged up 0.6% on a like-for-like basis, or 2.1% when currency swings were stripped out.
But it’s been a difficult couple of years for the high street institution. It issued a shock profit warning at the very start of 2014, saying the holidays had been a ‘sea of red’ on the high street. It also ditched its finance director Simon Herrick who had demanded a discount from suppliers days before Christmas 2013 and subsequently been pilloried for the so-called ‘Santa tax’.
Meanwhile, it’s had to wean itself off the merry-go-round of never-ending promotions and expand its online sales, which grew 11.4% in the year to August. Clearly that wasn’t happening fast enough for investors. Debenham’s shares have, unsurprisingly, been on a rollercoaster ride and are just 6% higher than five years ago.
Sharp will stay on to help find a successor, but his departure - ‘sometime in 2016’ - was greeted with a thumbs-up: shares were up more than 4% to 84.45p in mid-morning trading.