Debenhams PLC Chairman Ian Cheshire on Jan. 10 resigned with immediate effect after he failed to secure re-election from shareholders at the U.K. department store operator's annual general meeting.
The re-election of CEO Sergio Bucher also was defeated by shareholders, but Debenhams said in a statement that the board and Bucher had agreed that Bucher should continue in his role.
"The board believes that it is in the best interests of Debenhams PLC that the executive team remains fully focused on delivery of" its turnaround plan, the company said in supporting its decision to retain Bucher.
Debenhams blamed the results of the vote on two major shareholders. Sports Direct International PLC, a U.K. sports and leisurewear retailer, and an investment vehicle controlled by Indian businessman Micky Jagtiani opposed the reappointments. Sports Direct owns 29.73% of Debenhams and Jagtiani controls 7.55%, according to S&P Global Market Intelligence.
Debenhams said the re-election of Cheshire, chairman since April 2016, was opposed by 56.62% of the shareholder votes cast, and the re-election of Bucher was opposed by 55.85%.
Debenhams' share price has steadily eroded in the past three years as the company has struggled to adapt to the challenging retail environment. Based on a closing price Jan. 10 of less than 5 pence, its market value is less than £70 million.
Terry Duddy, Debenhams' senior independent director, was appointed interim chairman. "I recognize that individual shareholders have wished to register their dissatisfaction," Duddy said. "My first task is to meet with shareholders so that I understand any concerns that they may have."