Dixon’s Carphone leading shareholders wants directors to accelerate the search for its new boss after a warning from last week’s shock profit wiped almost a quarter off the market value of the company’s stock.
It was learned by Sky news that some of the top 10 investors of the retailer will press Dixons Carphone chairman, Lord Livingston of Parkhead, to expedite succession planning amid growing pressure on Chief Executive Seb James.
The board is said to have already initiated a search, although, someone close to the company said it was just a part of “normal succession planning.”
One of the first signs of genuine disgruntlement regarding the mobile phone and electrical goods chain’s leadership is the demand from some of the investors since the £3.8bn merger of Carphone Warehouse and Dixons Retail in 2014.
Mr. James joined the company in 2008 and had run Dixons since early 2012.
The company’s shares have lost more than half of its value over the previous year, a drop accelerated by an alert last week that profits from this year would be below City forecasts by as much as 30%.
The trading downturn was blamed by Mr. James on consumers who are holding on to their existing mobile handset for longer periods, while the post-Brexit vote decrease in the value of sterling also affected the matter by increasing the cost of new devices to British consumers.
Not one of the shareholders who wish to accelerate Dixons Carphones plans for a change in leadership is asking for Mr. James to be dismissed immediately.
A City source, however, stated on Monday that the dissatisfied investors believed that in recent months, Mr. James had “taken his eye off the ball” and “lost control of the company.”
Without providing more details, another stated that he had “not taken the necessary tough decisions.”
In July, Sky News reported that one of the candidates shortlisted to take the place of Adam Crozier as ITV’s chief executive was Mr. James.
However, the position was given to the boss of easyJet, Carolyn Mccall, instead.
Some of Dixon’s Carphone’s investors believe that Mr. James may have been demotivated by the expensive nature of a lucrative bonus scheme which has failed to materialize because of the decrease in its share price.
However, some sources close to Dixons Carphone quickly sprang to defend Mr. James, claiming that the profit warning from last week was James’ “first big mistake” as the boss of the company
An insider stated that the board “remains supportive of Seb and the team, and will be talking to shareholders over the coming weeks.”
They continued that Dixon’s Carphone’s profitability continued to be well more than the consolidated profits of the two companies before the merger.
The views of the founders of Carphone Warehouse who control close to 20% of Dixons Carphone between them, Sir Charles Dunstone and David Ross, were not clear on Monday.
However, after Sir Charles stepped down as chairman this year to focus on his role at TalkTalk, the two businessmen no longer have a formal involvement with the business.
The spokesperson for the retailer, which presently has a market value of only £2.1bn, refused to comment.