THE chief executive of Debenhams faced the ignominy of being kicked off the board by major shareholder Mike Ashley last night as the troubled retailer battled for its future.

Ashley’s Sports Direct, Debenhams’ biggest shareholder with a 29.7 per cent stake, and Dubai-based Milestone Resources, voted against the re-election of Sergio Bucher at the department store chain’s annual general meeting (AGM) yesterday afternoon.

It came on a day Debenhams reported grim trading over the festive period, with the retailer revealing that it has been holding talks with its lenders over refinancing its debt. One insolvency specialist warned Debenhams was running out of time to secure its future.

The AGM saw only 44.15% of the voted shares go in favour of the re-election of Mr Bucher to the board. However, the company said in a statement that the board and Mr Bucher agreed that he should continue as chief executive. Chairman Sir Ian Cheshire, whose re-election was also opposed by Ashley and Milestone, resigned with immediate effect.

Debenhams said: “The board is mindful of its responsibilities to all shareholders and has full confidence in Sergio and in the management’s plan to reshape the business. As a result, the board and Sergio have agreed that he should continue as CEO of Debenhams plc, reporting to the board. The board believes that it is in the best interests of Debenhams plc that the executive team remains fully focused on delivery of the plan.”

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The drama came on a day Debenhams underlined the brutal trading conditions on the high street - sparked by Brexit uncertainty and the relentless march of online sales- as it reported a 3.8 per cent fall in gross sales for the six weeks to January 5, compared with a year earlier. Shares plunged nearly 15%.

Debenhams had announced in October it would shut 50 stores – around one-third of its total – to slash costs in the next three to five years, putting 4,000 jobs at risk. While it said then that the action would help it cut costs by

around £50m a year, it said this will now rise to at least £80 million, having identified further savings opportunities.

The chain said it has held “constructive” talks with lenders over refinancing its debt, disclosing that it has “put on hold further asset disposals until the outcome of those discussions is known.”

The company added: “This process includes options to bring new sources of funding into the business to ensure the appropriate capital structure.”

Debenhams said its net debt stood at £286m at January 5, adding that it has committed debt facilities of £520m.

Julie Palmer, a partner at restructuring specialist Begbies Traynor, suggested Debenhams may reconsider its decision to rebuff a £40m loan offered by Ashley before Christmas.

Ms Palmer said: “The department store [Debenhams] has seen its shares drop by more than 81% during the past year, and today’s announcement won’t help to

ease the growing fears among investors. Having already confirmed up to 50 store closures in October, the retailer will need to implement further cost reduction strategies if it is to avoid the same fate as House of Fraser. As Brexit approaches... Debenhams is running out of time to secure its long term future. Although Mike Ashley’s offer of £40m was

previously snubbed before Christmas, it may be becoming an ever more attractive proposal.”

Debenhams said same stores sales were down 3.4 per cent for the six weeks to January 5. UK like-for-like sales were down by 3.6%, with weak store footfall offset by digital sales growth of 6%. The retailer is on track to deliver a profit of £8.2m for the year – in line with expectations.

Chief executive Sergio Bucher said: “We have worked hard to deliver the best possible outcome in very uncertain times for retailers.”

Shares in Debenhams closed down 0.83p, or 14.7%, at 4.82p.