Friday, August 23, 2019

Can Chairman Cheshire turn over new leaf for Debenhams?


Sir Ian Cheshire, the former boss of B&Q owned Kingfisher and recently appointed Debenhams Chairman, has said there are “multiple opportunities to exploit” at the department store chain.

Cheshire was appointed to Debenhams last week, replacing Nigel Northridge just as the high street giant celebrated its “best ever December and Christmas”.

In 2013 the British retailer issued two profit warnings, following the ill-fated decision to offer continuous promotions, and last year suffered a lack of underlying sales growth.  Debenhams surprised the market with its 1.7% increase in like-for-like sales over the festive trading period.

“There‘s a genuine chance to talk about new Debenhams rather than hark backwards all the time,” Cheshire told The Sunday Times.

His appointment comes on the back of deep rooted criticism from investors. City stockbroker Cenkos was long speculated to be rallying boardroom support against key members of management. After months of rumours, Michael Sharp announced in October that he would be stepping down as CEO of the company, and current Chairman Nigel Northridge is set to depart in April.

Despite this Cheshire has shown confidence in the company‘s future, citing that it has been “under pressure to rebuild its fundamentals” and catch up on investment in systems and online ordering since 2013. He also told The Sunday Times that Debenhams had suffered “an overhang of the narrative” from its controversial spell under private equity ownership, which saw it return to the stock market laden with debt in 2006.

“It‘s been on the back foot and had a perception that it was ailing or beleaguered,” Cheshire said. “Actually, by the work of Michael and the team preparing for Christmas, it‘s got an opportunity to restore itself and look forwards. My focus is going to be finding a chief executive.”

It is understood there are internal and external candidates lined up for the position. “It‘s about two main qualities,” Cheshire outlined. “Leadership, because this is a big team and a complex challenge, and product skills. It‘s not necessarily going to be someone who‘s run a plc before, but a great product-led retailer.”

The 56-year old Cambridge graduate said there was scope to broaden Debenhams‘ range beyond clothing, in areas including beauty and gifts, improve the e-commerce offering and expand overseas.

“To some extent you don‘t have an opportunity to get into that if you‘ve got to fix the immediate issues, but there‘s been some very interesting work done,” he said. “If you can articulate that then you can see there‘s a place for a curated choice on the high street — one that can recycle its brands more rapidly.”