Rumours fly as Debenhams chief abruptly quits

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The Independent Online

Terry Green, chief executive of the department store group Debenhams, yesterday quit his £400,000-a-year post amid intense speculation as to where he will resurface.

Terry Green, chief executive of the department store group Debenhams, yesterday quit his £400,000-a-year post amid intense speculation as to where he will resurface.

Mr Green, 47, resigned from Debenhams after 12 years at the company, including nine as chief executive, "to pursue a new business opportunity". The surprise move sparked rumours that he was bound for Bhs, the former Storehouse business which was sold to Philip Green, the retail entrepreneur, for £200m earlier this year. There was also speculation he could be leaving to head up a consortium bid for Marks & Spencer.

Belinda Earl, 38, the group's trading director has replaced Mr Green with immediate effect.

M&S shares jumped 17p to 228p on hopes of renewed bid interest, having last month hit a 10-year low of 207.5p.

Analysts suggested the two Mr Greens could team up to launch an offer for the struggling retailer. Philip Green, who was unavailable for comment yesterday, withdrew his intention to make an earlier approach in February.

A spokesman for M&S declined to comment, but poured cold water on suggestions that Terry Green had been asked to replace Peter Salsbury as the group's new chief executive. The spokesman said: "He has not been approached by M&S to run the company."

Emily Shamma, an analyst at WestLB Panmure, said: "I think it is more likely that [Terry Green] would take the job at Bhs." She said the former Debenhams boss could make a healthy personal profit by bringing Bhs to the stock market following its split from Mothercare and subsequent sale to Philip Green.

The City reacted harshly to the news that Debenhams had lost its long-serving chief executive, knocking 8.75 per cent off the shares, which closed down 17.5p at 182.5p. Ms Earl said: "We think this is a normal City reaction to a surprise. I have not had a chance to talk [to the City] yet. I hope that is something I will be able to do in forthcoming weeks."

Mr Green attracted both bouquets and brickbats during his time at Debenhams, with some praising his success in turning the business around, while others criticised his leadership style as "weak".

One analyst commented: "His departure is not such a great loss. I don't think Terry Green was as good as his own PR would have us believe."

Terry Green's departure from Debenhams comes just a week after Allan Leighton, the former Asda chief executive who headed Wal-Mart's European operations, resigned from his post at the supermarket giant. Matthew McEachran, an analyst at Investec Henderson Crosthwaite, said: "It's too much of a coincidence, isn't it?". Despite strong denials from Mr Leighton that he was planning an assault on M&S, Mr McEachran suggested that he could also be joining Bhs with a view to eventually combining the two businesses. He said: "All the indications are that that is what's happening ... Philip Green didn't just buy Bhs to turn it into a discount store."

Ms Earl joined Debenhams in 1985 after completing a graduate training programme at Harrods, and has since held a series of senior positions in buying and merchandising. She joins three other women as chief executive of the top 350 UK companies: Marjorie Scardino at Pearson, Bridget Blow at Itnet and Hilary Cropper at FI Group.

Debenhams reported a £5.6m fall in pre-tax profits to £73.8m in the half-year to 26 February. Turnover fell by £10.1m in the period to £775.1m. In a recent trading statement, the company said like-for-like sales had risen by 6.6 per cent over the summer period, with clothing sales showing a strong recovery.