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Debenhams profits up 5.5% as hunt for new boss nears end

By Holly Williams

Published 15/04/2016

The clothes sector has suffered
The clothes sector has suffered

Department store chain Debenhams - which has five stores in Northern Ireland - has said it is "in the final stages" of appointing a new chief executive as boss Michael Sharp confirmed his resignation on unveiling a rise in half-year profits.

Mr Sharp, who announced plans in October to leave this year, said he had now handed in his resignation but still planned to remain at the helm until his successor was appointed.

The group said the appointment process was "well advanced", and recently-hired chairman Sir Ian Cheshire added that an announcement was expected in the next few weeks.

Confirmation of Mr Sharp's resignation comes alongside a solid set of half-year results, with a 5.5% rise in group pre-tax profits to £93.8m for the six months to February 27. However, group like-for-like sales growth slowed to 1.1%, down from 1.9% over the Christmas season.

Debenhams' 165 UK stores saw sales rise 2.9%, off-setting a 3.7% fall at an international arm hit by currency exchange rates.

In his last set of results before bowing out, Mr Sharp said the chain put in a "strong" half-year performance, shrugging off the recent gloom from rivals such as Next and Marks & Spencer.

Next sent shockwaves through the clothing sector last month when it warned the year ahead was set to be the "toughest we have faced since 2008" as it cautioned over profits, while Marks & Spencer last week posted another hefty sales fall in its clothing division, down 2.7%.

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

"When I leave the business later this year I am confident that it will be in a good position to deliver continued sustainable growth under a strong and capable management team."

Shares in the group rose more than 3% after the half-year results.

Sir Ian, the former chief executive of B&Q parent Kingfisher, who formally succeeded Nigel Northridge as chairman last week, said he had been helping with the search for a successor to Mr Sharp's role since mid-January.

It is thought that those in the running include Mothercare boss Mark Newton-Jones, who has been with the baby and maternity-wear chain for two years, Mike Shearwood, the former head of the Karen Millen womenswear chain, and Stuart Machin, the current managing director of Australian retailer Target.

Belfast Telegraph

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