It is understood Sports Direct, which is controlled by Mike Ashley and is a 29.7% shareholder in the business, along with Dubai-based Landmark, another shareholder, voted against the re-election of Cheshire and his CEO, Sergio Bucher.
However, Bucher survived the putsch with 44% vote, while Cheshire’s 43% was apparently deemed enough that he should step down.
In a statement to media, Debenhams said: “Given the decision of two major shareholders who voted against his re-election to the board, Sir Ian has concluded it is no longer possible for him to remain chairman of Debenhams plc.”
Director Terry Duddy will take over as interim CEO with immediate effect.
The news comes just hours after Debenhams announced disappointing Christmas trading results, and is the culmination of months of wrangling about what direction the beleaguered department store chain should take amid a plummeting share price and three profit warnings in a single year.
A year ago, Debenham’s shares were worth 36p, but have fallen to under 5p today, which means its market capitalisation is now below £70m.
The business also has debts of around £500m, and is in the process of trying to reach a deal with stakeholders on a restructuring plan which would include shuttering stores and laying off thousands of staff.
Before Christmas, an email from Ashley to the Debenhams senior management beseeching them to take his advice and money as a way of rescuing the business from collapse was widely circulated.