Debenhams seeks new CEO for new era, Bucher expected to quit soon
Sergio Bucher, the CEO who hoped to turn Debenhams around but actually presided over its decline, is expected to step down from his role within the next few days with some observers saying an announcement could come as soon as Monday.
Bucher, a former Amazon exec, took the role in October 2016 and had hoped to turn the venerable department store chain into an omnichannel retail beacon and a pioneer of social shopping. Instead, the company has seen profit warnings, debt problems, a very public and acrimonious spat with its former largest shareholder Sports Direct, and last week’s administration filing and pre-pack buyout deal.
Press reports said the retailer’s new owners, made up of lenders Barclays, Bank of Ireland, Silver Point and Golden Tree Asset Management, are unhappy with Bucher’s performance. They believe the company needs new leadership to take it forward in what remains a difficult time for the retail sector.
Bucher’s previous experience had been in both physical and digital retail as he had been in charge of Amazon’s fashion business in Europe as well as having roles at other big names, including Nike, Puma and Inditex’s Zara.
His Debenhams Redesigned strategy saw the company focusing on more retail experiences and on boosting key growth areas such as beauty. But it not only failed to spur fresh growth, it completely failed to arrest the firm’s rapid decline.
Sports Direct boss Mike Ashley had hoped to force his way into the CEO’s chair after voting Bucher off the board and precipitating the resignation of the retailer’s then chairman. But it seems that he too didn’t have the confidence of the company’s big lenders given the slow progress that has been made at House of Fraser since Sports Direct took it over.
The blame for the Debenhams debacle can’t be entirely laid at Bucher’s door, of course. The chain was saddled with a hard-to-manage debt load of over £700m when its previous private equity owners exited and returned it to listed company status. And previous management had failed to respond to changing conditions fast enough. While other department stores like John Lewis and Selfridges were adapting to meeting the new retail realities, Debenhams (and HoF) stuck to the tried and trusted department store model for way too long.
A source close to Bucher reportedly said: "Having stayed on after the annual general meeting and got the refinancing in place, Sergio thinks now would be the right moment to move on. The upcoming restructuring can then be led by someone offering a fresh start.”
But who would that someone be? That’s unclear for now but what is clear is that Debenhams needs a dynamic leader with fresh thinking.
There have been reports that Terry Duddy, currently interim non-executive chairman, could become executive chairman. He has an impressive track record. Until March 2014 he was CEO of Home Retail Group after its demerger from GUS in October 2006. He had been CEO of Argos since its acquisition by GUS in 1998. He’s also a non-executive director of Hammerson and Majid Al Futtaim Properties LLC and Chair of the Retail Trust.
If he takes that role, his first priority would be to get the chain’s landlords to agree to its CVA plans. The Times reported that these plans are already well under way with Stefaan Vansteenkiste, a managing director at consulting firm Alvarez & Marsal, lined up as chief restructuring officer.
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