COMMENT: Hoerner faces a tough task at Burton

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The Independent Online
Another retail conglomerate is biting the dust. Storehouse is a slimmed down shadow of its bloated 1980s self. Sears is all set for break-up. Now Burton is going the same way. A genuine strategy for building shareholder value? Or just another manoeuvre to distract attention from the group's underlying weaknesses?

In Burton's case, there was never much logic to Sir Ralph Halpern's lumbering creation. The similarity between department stores and high street fashion chains are few and far between, as Sears has found. The problem with Burton has been that one of its two divisions always seems to have dragged the rest down. When Sir Ralph pulled off the Debenhams deal in 1985, it was Debenhams itself that was crumbling. Now it is the other way round.

John Hoerner may, as a consequence, be doing the right thing here. Analysts are pencilling-in a value of 100p per share for a standalone Debenhams and 50p for the multiples, which is quite a premium to yesterday's close of 125.5p. Some number-crunchers are even talking about the two businesses being worth a combined pounds 2.3bn, against pounds 1.8bn now.

Maybe. Certainly it is a relief that Mr Hoerner is taking on the more difficult of the two management tasks, the multiples. For all the talk of fancy valuations, the amiable Nebraskan will have to work a special kind of magic on a group of chain stores that that combine poor margins, relatively weak brands and high costs. Cutting the latter may be easy. Building the other two will be a good deal tougher.

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