City File: City convinced that London Electricity will axe operation

THE City is now convinced that London Electricity will take the axe to its retail operation, which lost pounds 11.5m last year. Only a sharp increase in sales over Christmas was likely to save the division, and utilities and stores analysts are betting against that.

LE says it will announce what it will do with its chain of out-of-town stores and Debenhams' concessions at its full-year results in March.

The options are fast running out. A tie-up with another regional electricity company's retail business could offer a way out, but LE would probably have done that already if it could.

Still, some of the stores would make a strategic fit into the joint venture formed last year by Midlands, Eastern and Southern Electricity.

LE would just have to hope it could get a good price for the other sites.

As for the concessions: 'Opening these was the killer blow, creating communications and distribution problems. They should cut their losses and run,' said one analyst.