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* Internal and external candidates considered for CEO job
* CEO Michael Sharp formally resigns
* First-half profit beats expectations
* Shares up 3.2 pct (Adds chairman, CEO comment, shares)
By James Davey
LONDON, April 14 (Reuters) - Debenhams, Britain'ssecond-largest department store group, expects to announce a newchief executive to succeed Michael Sharp in the next few weeks.
Chairman Ian Cheshire told reporters on Thursday therecruitment process was reaching its conclusion.
"We've still got a process of internal and externalcandidates to finalise," he said.
Last October, Sharp said he planned to step down as CEO atsome point in 2016 after five years in the job and 30 years atDebenhams or its predecessor, the Burton Group.
Analysts regard trading director Suzanne Harlow as theleading internal candidate. Media reports have also linked MarkNewton-Jones, the current CEO of Mothercare, and MikeShearwood, the former boss of Karen Millen, with thejob.
Debenhams, which trails John Lewis by annual sales,said Sharp submitted his resignation to the board on Thursday,triggering a 12-month notice period. He will remain as CEO untilhis successor is confirmed to ensure a smooth handover.
Under Sharp's leadership, Debenhams built its non-clothingcategories, such as beauty, shed a reliance on discounting andcut back on promotions, added concessions in under-used storespace, built up its online offering and expanded abroad.
However, the firm trading from 253 stores across 27countries has seen little sales and profit growth in recentyears, while its shares are well down on their November 2012peak of 124 pence.
First-half results on Thursday showed some progress, sendingDebenhams shares up 3.2 percent to 79.8 pence at 0854 GMT.
Pretax profit rose 5.5 percent to 93.8 million pounds($132.5 million) in the six months to Feb. 27, ahead ofanalysts' average forecast of 91 million pounds.
Sales rose 1.6 percent to 1.63 billion pounds, with sales atstores open over a year up 1.1 percent and gross margin up 20basis points. The interim dividend was raised 2.5 percent to1.025 pence a share.
"Although there is plenty more to do, we are on track todeliver full-year results in line with market expectations,"said Sharp.
Analysts' average forecast for 2015-16 pretax profit is118.2 million pounds, according to Reuters data, up from 113.5million in 2014-15.
British consumers reined in spending last month, accordingto surveys published on Tuesday which added to signs of aslowing economy. Analysts have blamed faltering global growthand uncertainty ahead of a UK referendum on EU membership inJune.
Debenhams' rival Next last month warned this yearcould be the most difficult since 2008.
"It's quite clear ... that the market is tougher at themoment," said Sharp.
($1 = 0.7078 pounds) (Editing by Jason Neely and Mark Potter)
