The retail veteran who chairs Debenhams is to step down as the department store chain’s owners install a company doctor as its next chief executive.
Sky News has learnt that Debenhams will announce this week that Terry Duddy, its chairman for much of a tumultuous last year, is leaving next month.
Mr Duddy, whose previous jobs included running Argos and Homebase, will hand over the reins of the embattled company to Stefaan Vansteenkiste, who has been Debenhams’ chief restructuring officer since it emerged from a brief stint in administration in April.
The appointment of Mr Vansteenkiste as chief executive underlines its shareholders’ belief that the company requires a turnaround expert, rather than a retail wizard, to steer it through a defining Christmas trading period.
Sources said the management changes would be publicly announced on Thursday.
The reshuffle will come as Debenhams continues to face the existential threat of a legal challenge – funded by Sports Direct International - to a financial restructuring that was approved earlier this year.
A court hearing is due to take place next month.
People close to Debenhams said it was confident it would win the case and stressed that it would appeal if it did not.
Insiders pointed out that Debenhams’ senior management team included several experienced retail executives, while Mr Vansteenkiste has played a hands-on role in turning around retailers including Intertoys and Bally Shoes.
One source said that while the department store chain had conducted a rigorous search including several external candidates, the urgent need for continuity had led its board decide that Mr Vansteenkiste was the appropriate choice for the role.
Mr Vansteenkiste will replace Sergio Bucher, who was ousted from the board earlier this year following a stormy annual meeting.
A successor to Mr Duddy as chairman of Debenhams’ parent company will be recruited in due course, according to insiders.
The management changes come as Debenhams lines up additional financial support to see it through to the crucial Christmas trading period.
Sky News revealed last month that the company’s lending syndicate has been told that it expects to require access to additional borrowing facilities of about £50m during the autumn.
Debenhams was taken over by its creditors in April following a furious battle with the Sports Direct tycoon Mike Ashley, who sought to install himself as the department store chain’s chief executive and provide financing to it on preferential terms.
The company has since announced plans to close 50 of its 166 UK stores, with the first tranche of 22 closures planned for next year.
In total, the plan will lead to more than 4000 jobs being lost, the latest in a grim toll of high street casualties.
The extra funding support is expected to provide a war-chest for deep price cuts during a Christmas trading period in which bargain-hunters are likely to be well-rewarded as retailers fight an intense battle for market share.
Numerous chains have been forced to seek compromise agreements with creditors, the most prominent of which has been Sir Philip Green’s Arcadia Group, the owner of TopShop.
His proposed restructuring is now the subject of a legal challenge from a US-based creditor, Vornado.
This week, Sports Direct has taken control of Jack Wills and Boohoo, the online-only retailer, has acquired the Karen Millen and Coast brands, sparking fears for hundreds of jobs.
Both deals were implemented through pre-pack administrations.
Hedge funds including Goldentree Asset Management and Silver Point now own big stakes in Debenhams through a holding company called Celine.
After its brush with insolvency, Debenhams’ administrators ran a sale process, which concluded with a decision that no compelling bid had been received.
Debenhams declined to comment on Wednesday.