LONDON, ENGLAND - APRIL 12: A man takes a photo of a sign in the window of the Debenhams flagship store on Oxford Street that informs customers of its current ownership on April 12, 2019 in London, England. It has been anticipated for some time that the retailer was to fall into administration. As the retailer's lenders take over, all stores currently remain open but with some marked for closure. Businessman Mike Ashley has registered an interest in taking over the company but the future of the department store is still unknown. (Photo by Chris J Ratcliffe/Getty Images)
A man takes a photo of a sign in the window of the Debenhams flagship store on London's Oxford Street that informs customers of its new ownership © Getty

Debenhams’ chief executive Sergio Bucher is expected to step down in the next couple of days following a protracted boardroom battle that led to the department store chain’s eventual administration last week.

“Having stayed on after the AGM and got the refinancing in place, Sergio thinks now would be the right moment to move on,” said one person close to Mr Bucher. “The upcoming restructuring can then be led by someone offering a fresh start.”

Mr Bucher is expected to be replaced by interim chairman Terry Duddy who has been on Debenhams’ board for about four years, according to people briefed on the process.

The chief executive would be relinquishing his position just a week after the department store chain fell into administration after a bitter tussle with its largest shareholder, Sports Direct.

Despite numerous attempts by Sports Direct and its billionaire founder Mike Ashley to take control of the business, Debenhams was put into a “pre-pack” administration — in which a buyer is lined up in advance. The operating subsidiaries were sold back to the investor consortium, which is led by Silver Point Capital, a US-based hedge fund, along with Barclays, Bank of Ireland and London-headquartered fund GoldenTree.

Mr Ashley described the process as a “national scandal”.

Mr Bucher took over at the department store group in 2016, following a three-year stint as the head of Amazon’s European fashion business and jobs at Puma, Nike and Zara owner Inditex. In 2017 he announced a “Debenhams Redesigned” scheme, which involved putting 2,000 more staff in customer-facing roles and investing in online shopping via mobile, according to an announcement at the time.

However, since his appointment the company’s shares have lost nearly 90 per cent of their value and last year Debenhams issued three profit warnings.

A second person close to the business said Mr Bucher “would have been the perfect CEO, but in another situation. He has outstanding skills in online retailing but nothing could have prepared him for what he has encountered”.

In January Mr Ashley, who through Sports Direct owned 29.9 per cent of Debenhams, succeeded in forcing Mr Bucher and chairman Ian Cheshire off the board when he voted against their reappointment at the company’s annual meeting.

Mr Bucher stayed on as chief executive while Sir Ian was replaced by Mr Duddy.

A spokesperson for the investor group that now owns Debenhams said the consortium had injected £200m into the retailer to “see it through the restructuring process”.

“Within the consortium, there is extensive turnround experience, which we will deploy to support the management’s turnround plan,” they added.

Mr Ashley’s latest attempt to take control of the business was a commitment to underwrite a £200m share issue, which was rejected by lenders due to the condition that he became chief executive.

In a statement, Mr Ashley described the administration process as “an underhand plan to steal from shareholders”.

The person close to Mr Bucher said the chief executive had “behaved with good grace” despite the “extreme provocations” he had faced. They added that nothing was confirmed regarding Mr Bucher’s position but that Debenhams’ new consortium of owners was looking to address the current make-up of the management team.

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