(Reuters) - Sports Direct Chief Executive Mike Ashley plans to leave his current role and the retailer’s board to focus on running Debenhams, Sports Direct said on Thursday, in an attempt to turn around the struggling British department store group.
Sports Direct, which owns a near 30 percent stake in Debenhams, said it was calling for a general meeting of Debenhams shareholders to remove all but one of the existing board members and appoint Ashley to an executive role.
He would then forego his position as chief executive of Sports Direct, the discount sports goods and clothing powerhouse he founded in 1982 and has built into one of Britain’s most recognisable retail names.
Debenhams said in an e-mailed statement it was “disappointed” that Sports Direct made the move to call for changes to its board, adding that its board has been engaging with Sports Direct and its other stakeholders.
If Sports Direct’s plan goes through, Chris Wootton, currently Sports Direct’s deputy chief financial officer, would step up to take the role of acting chief executive, the company added.
“If Mr Ashley were to be appointed to the board of directors of Debenhams during this business critical period for Debenhams, Mr Ashley would carry out an executive role, and would focus on the Debenhams business,” the mid-cap company said.
The news comes just days after Debenhams, which traces its history back to 1778 and has recently struggled to keep pace with consumers moving online and to cheaper rivals, warned on profit again, as it edged nearer to a restructuring.
Debenhams, which last month secured 40 million pounds in extra funding from some of its lenders, said on Thursday it remained focussed on the restructuring of its balance sheet and that discussions were well advanced.
British shoppers, as in much of the rest of the world, are shifting towards online shopping, thereby hurting traditional retailers as subdued consumer spending and rising costs also take their toll.
Ashley’s desire to take control of the struggling department store chain followed Sports Direct’s vote against the re-election of Debenhams’ Chief Executive Sergio Bucher and former Chairman Ian Cheshire at the annual general meeting in January.
Debenhams’ shares plummeted 85 percent last year.
Ashley has taken a series of dominant stakes in some of Britain’s struggling high street chains over the last two years.
Sports Direct bought department store chain House of Fraser out of administration last year and analysts have since speculated that he might want to put the two department store groups together.
Reporting by Muvija M in Bengaluru; editing by Patrick Graham and Alexandra Hudson