August 30, 2017 / 10:15 AM / 4 months ago

UPDATE 1-Dunelm's chief leaves as retailer seeks "different leadership"

* Dunelm has seen sales growth under Browett

* Shares among biggest FTSE midcap fallers

* Dunelm under Browett: bit.ly/2goi5K3 (Adds company comments, details, share movement)

By Noor Zainab Hussain and Esha Vaish

Aug 30 (Reuters) - Dunelm’s Chief Executive John Browett is to step down just over two years into the job at the British homewares retailer which said it would seek “different leadership” for its next phase of growth.

The company, which sells cushions, bedding and kitchen equipment, said on Wednesday that Browett was leaving for personal reasons.

“Dunelm has made good progress over the last two years during John’s tenure, however the next phase of growth requires different leadership,” the company said in a statement.

A Dunelm spokeswoman said Dunelm wanted to bring in somebody who understood retail and had “very strong” execution skills to implement the company’s existing strategy.

Browett took over as Dunelm’s chief in June 2015, having previously worked as a senior vice president of retail at Apple Inc and chief executive at Dixons Retail, which merged with Carphone Warehouse to form Dixons Carphone.

Browett said in a statement it was “time to move onto a new challenge”. He did not respond to a LinkedIn request seeking further comments.

Dunelm has produced like-for-like sales growth over the past two years, but along with other British retailers is facing a more challenging retail environment, where inflation has started to squeeze consumer spending.

“In the end, (Browett’s departure) appears to be more about the style of leadership rather than the underlying performance of the business,” Peel Hunt analysts wrote in a note.

Peel Hunt analyst John Stevenson said the business itself had been performing well so that the company might be looking for a “more inclusive people-focused (management) style.”

Dunelm’s shares were down more than 3 percent at 0959 GMT, making them the second biggest fallers in the FTSE Midcap Index .

Dunelm said it would start looking for a new CEO, with Chairman Andy Harrison providing executive leadership in the meantime.

Matthew McEachran, analyst at N+1 Singer analyst, said that while Dunelm was not short of capable management to plug the gap, a period of weakness was likely to cause some negative reaction.

Dunelm has been stepping up store openings, following its acquisition of WorldStores and has also been rolling out new stores for its baby equipment retailer Kiddicare.

The company said on Wednesday trading in the first two months of the new financial year had started positively, with an “encouraging” like-for-like sales performance.

Dunelm Browett’s severance terms were still to be finalised. His termination payments will cover contractual entitlements which amount to six months base salary plus pension and benefits.

Browett received 981,600 pounds as remuneration in the financial year ended July 2.

Reporting by Noor Zainab Hussain in Bengaluru, editing by Louise Heavens and Jane Merriman

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