Comment: A high-flier with the skids under him at Sears

`It may be that Mr Strong has good excuses for his failure to deliver shareholder value, but when you are paid nearly pounds 500,000 a year, excuses are not what shareholders expect'

Liam Strong has had four years to turn around Sears, the struggling retail giant; as yesterday's results showed, he has failed to make much, if any, progress. Sears is such a ragbag of unconnected retail businesses that this may not all have been his fault. The task may always have been largely impossible. The City is a ruthless and unforgiving place, however, and there can be little doubt that time is fast running out for this former British Airways high-flier. The skids are under him, and Mr Strong will be lucky to see in another Christmas trading season.

How could things have gone so badly wrong? He started reasonably well, if slowly, and made low-profile progress for the first couple of years. Geoffrey Maitland Smith, who had been there for donkey's years, first as chief executive and then chairman, would go, he promised, and the deep problems of British Shoe Corporation would be addressed. It was not until last year that Mr Maitland Smith finally slipped away, unloved and unnoticed, and judging by the latest calamitous results, Mr Strong has never managed to get to grips with British Shoe.

Indecision, prevarification, lack of direction - this was the sort of culture for which Sears has long been known. Nothing much seemed to change after Mr Strong arrived. Executives came and went with alarming rapidity. Few of them could have had time to develop, let alone execute a strategy for the businesses they were charged with, even if they had been the right choices in the first place. The company's price continued to flounder and the share has barely moved since Mr Strong arrived, underperforming the rest of the stock market by 35 per cent.

More recently, there have been some real howlers: the write-down of old footwear stock and the attempt to sell it off cheap alongside the new lines, and the too-rapid roll-out of new formats cannibalising old ones along the way, to cite just two. In the end Mr Strong's solution was the one he could have applied right at the start - to sell the problemsome businesses entirely. When he finally bit the bullet, however, it was at knockdown prices, which have cost all last year's profits and the same again in write-downs and rationalisation expenses. To give away a large slug of your market share to Stephen Hinchliffe may or may not be an acceptable thing to do but when it is at considerable cost to the balance sheet it seems hard to justify. The expensive leases on these unwanted shops could yet revert to Sears if the Hinchliffe business founders.

The one business that seems to be doing well, Selfridges, was the one Mr Strong had originally earmarked for sale. Management never had any proper view of what the core businesses should be or what strategy should unite them. It may be that Mr Strong has good excuses for his failure to deliver shareholder value, but when you are paid nearly pounds 500,000 a year, excuses are not what shareholders expect. They expect solutions. Sir Bob Reid, the chairman, says Mr Strong has the support of the board and so far institutions seem prepared to see if the latest deck-clearing can bring about some relief. But who can believe the promise of better times ahead after the latest disappointments?

Manufacturing is not the main game

There is tremendous romance in manufacturing. Monuments like Fort Dunlop, just off the M6 at Birmingham, or the Llanwern steel works in South Wales, are evocative symbols of this country's former economic might. But manufacturing does not matter much in modern Britain. It produces less than a quarter of output and employs fewer than one in five of those with jobs.

This is not insignificant, but it highlights the danger of setting economic policy on the basis of manufacturing alone. To judge by the comments of some City pundits, the current weakness in industry is enough to set the tone for monetary policy. Yet even the CBI, no mean lobby for manufacturers, felt compelled to point out in yesterday's industrial trends survey that its corresponding surveys of retailing and financial services suggested the economy is picking up nicely.

Manufacturing is sending out distress signals at a time when services are growing quite strongly, the unemployment count is falling and financial markets are looking very buoyant indeed. Financial and business services alone account for 19 per cent of the economy. They grew at 3.9 per cent last year. The transport and communications sector, contributing more than 8 per cent of GDP, grew by an impressive 5.1 per cent. The output of the service industries as a whole grew five times as fast as manufacturing in 1995.

The fixation on the grimy glamour of manufacturing creates a deeper problem, however. It is not just a question of getting interest rates a bit wrong by focusing too much on the minority sector of the economy. It also means that Britain does not nurture its successes. The City has the money and influence to celebrate its own achievements. Outside the Square Mile, we downplay the economic importance of much British creativity and success in industries ranging from television and the music business through retailing to software and industrial design. They do not have their monuments yet, but they are three times as important to the British economy as manufacturing.

Bargain basement at Railtrack

The public response thus far to the great Railtrack share offer probably says as much about the goods on offer as Labour's dire but largely empty threats about what it would do to Bob Horton's trainset if it got into power.

The fact that 1.4 million would-be investors have registered with a share shop, allowing them to qualify for the extra goodies on offer, may sound impressive. But when you consider that Gencos 2, which was a secondary offer to boot, promising no one a fast buck, managed to elicit twice that number of registrations, it puts things into perspective.

Ah, says the fat controller in charge of flogging Railtrack to a wary public, but Gencos 2 was twice the size and we have only spent half the amount promoting it.

This kind of reasoning might be par for the course when drawing up railway timetables but it flies in the face of logic since the level of investor interest ought to be influenced as much by the returns available as the size of the offer.

In the case of Railtrack these are considerable indeed. The yield on the shares in year one makes them look like a steal not just in comparison with building society deposit accounts but also against almost any initial public offering we have seen before.

Still, even at this subdued level of interest the Railtrack offer should be comfortably subscribed, allowing the Government to claim a success of sorts and avoiding a nasty derailment in the after-market. Even so, the Railtrack flotation looks like being a Pyrrhic victory for politicians on both sides. In as much as Labour's threats have hit home, they have guaranteed that Railtrack will be knocked out at a bargain-basement price.

News
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Sport
Arsenal supporters gather for a recent ‘fan party’ in New Jersey
football
Sport
sportDidier Drogba returns to Chelsea on one-year deal
News
i100
PROMOTED VIDEO
Arts and Entertainment
The Secret Cinema performance of Back to the Future has been cancelled again
film
Life and Style
Balmain's autumn/winter 2014 campaign, shot by Mario Sorrenti and featuring Binx Walton, Cara Delevingne, Jourdan Dunn, Ysaunny Brito, Issa Lish and Kayla Scott
fashionHow Olivier Rousteing is revitalising the house of Balmain
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
News
people
News
BBC broadcaster and presenter Evan Davis, who will be taking over from Jeremy Paxman on Newsnight
peopleForget Paxman - what will Evan Davis be like on Newsnight?
Life and Style
fashionCustomer complained about the visibly protruding ribs
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Arts and Entertainment
Jo Brand says she's mellowed a lot
tvJo Brand says shows encourage people to laugh at the vulnerable
Life and Style
People may feel that they're procrastinating by watching TV in the evening
life
News
Tovey says of homeless charity the Pillion Trust : 'If it weren't for them and the park attendant I wouldn't be here today.'
people
Sport
Rhys Williams
commonwealth games
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

The benefits of being in Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Test Analyst - UAT - Credit Risk

£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Evan Davis: The BBC’s wolf in sheep’s clothing to take over at Newsnight

The BBC’s wolf in sheep’s clothing

What will Evan Davis be like on Newsnight?
Finding the names for America’s shame: What happens to the immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert?

Finding the names for America’s shame

The immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert
Inside a church for Born Again Christians: Speaking to God in a Manchester multiplex

Inside a church for Born Again Christians

As Britain's Anglican church struggles to establish its modern identity, one branch of Christianity is booming
Rihanna, Kim Kardashian and me: How Olivier Rousteing is revitalising the house of Balmain

Olivier Rousteing is revitalising the house of Balmain

Parisian couturier Pierre Balmain made his name dressing the mid-century jet set. Today, Olivier Rousteing – heir to the house Pierre built – is celebrating their 21st-century equivalents. The result? Nothing short of Balmania
Cancer, cardiac arrest, HIV and homelessness - and he's only 39

Incredible survival story of David Tovey

Tovey went from cooking for the Queen to rifling through bins for his supper. His is a startling story of endurance against the odds – and of a social safety net failing at every turn
Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little