Apr 14, 2016
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Debenhams to name new boss in weeks

Apr 14, 2016

Debenhams, Britain's second-largest department store group, expects to announce a new chief executive to succeed Michael Sharp in the next few weeks.

Chairman Ian Cheshire told reporters on Thursday the recruitment process was reaching its conclusion.

"We've still got a process of internal and external candidates to finalise," he said.

Last October, Sharp said he planned to step down as CEO at some point in 2016 after five years in the job and 30 years at Debenhams or its predecessor, the Burton Group.

Analysts regard trading director Suzanne Harlow as the leading internal candidate. Media reports have also linked Mark Newton-Jones, the current CEO of Mothercare, and Mike Shearwood, the former boss of Karen Millen, with the job.

Debenhams, which trails John Lewis by annual sales, said Sharp submitted his resignation to the board on Thursday, triggering a 12-month notice period. He will remain as CEO until his successor is confirmed to ensure a smooth handover.

Under Sharp's leadership, Debenhams built its non-clothing categories, such as beauty, shed a reliance on discounting and cut back on promotions, added concessions in under-used store space, built up its online offering and expanded abroad.

However, the firm trading from 253 stores across 27 countries has seen little sales and profit growth in recent years, while its shares are well down on their November 2012 peak of 124 pence.

First-half results on Thursday showed some progress, sending Debenhams shares up 3.2 percent to 79.8 pence at 0854 GMT.

Pretax profit rose 5.5 percent to 93.8 million pounds ($132.5 million) in the six months to Feb. 27, ahead of analysts' average forecast of 91 million pounds.
Sales rose 1.6 percent to 1.63 billion pounds, with sales at stores open over a year up 1.1 percent and gross margin up 20 basis points. The interim dividend was raised 2.5 percent to 1.025 pence a share.

"Although there is plenty more to do, we are on track to deliver full-year results in line with market expectations," said Sharp.

Analysts' average forecast for 2015-16 pretax profit is 118.2 million pounds, according to Reuters data, up from 113.5 million in 2014-15.

British consumers reined in spending last month, according to surveys published on Tuesday which added to signs of a slowing economy. Analysts have blamed faltering global growth and uncertainty ahead of a UK referendum on EU membership in June.

Debenhams' rival Next last month warned this year could be the most difficult since 2008.

"It's quite clear ... that the market is tougher at the moment," said Sharp.

$1 = 0.7078 pounds

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