British heritage brand Debenhams (DEB) announces that CEO Michael Sharp will be stepping down in 2016 following a five year stint in the hot seat.

Not entirely unexpected, the news accompanies encouraging financial results and a reasonably confident outlook statement ahead of Christmas, triggering a 3.2% share price rebound to 83.75p.

The department stores operator insists insists Sharp, in charge since September 2011, has always intended to serve a five year term. However his looming exit follows recent City rumours of activism from shareholders agitating for change following a tough few years for the retailer.

Two months into his fifth year, Sharp says 'now is the right time for the board to begin the process of identifying my successor. I will continue as chief executive throughout the Christmas trading period and into 2016 until a suitable successor has been appointed and settled into the role'.

Sharp adds: 'I hope being transparent about my intentions will stop recent speculation becoming a distraction, allowing me and the Debenhams team to focus on delivering our strategy and the important Christmas trading period.'

CEO - Michael Sharp

News of Sharp's departure comes as Debenhams delivers in-line full-year results, with profit before tax up 7.3% to £113.5 million on modest 2.1% like-for-like sales growth, reflecting 'good progress against our strategic priorities'.

Debenhams continues to wean itself off an addiction to margin-crimping promotions, its online business is growing rapidly and the retailer is investment in service offer improvements, including lower delivery charges.

The menswear, womenswear and beauty products seller is also seeking to optimise store space through concessions with the likes of Sports Direct International (SPD), Chi Kitchen and Costa Coffee.

Following strong cash generation, Debenhams announces a £41.7 million net debt decline to £319.8 million. Though the full-year payout is held at 3.4p, an increasingly confident Debenhams says 'the board is intending to adopt a progressive dividend policy in future.'

Web chart - DEB - Oct 15

Issue Date: 22 Oct 2015