Fresh fears for Sears as trading statement is awaited


The stock market is once again fretting about Sears. The struggling retailing group is due to produce a trading statement and fears are growing that it will offer little encouragement for investors.

More than most, Sears desperately needed bumper festive trading. But the word is that sales have not come up to expectations and analysts will be tempted to pull back profit forecasts again, perhaps from around pounds 100m to pounds 90m.

The suggestion is that although Selfridges did well other parts of the sprawling group had a less successful experience.

Liam Strong, the chief executive called in five years ago to mastermind a recovery, is banking on strong seasonal business to halt the flow of hostility from City institutions. Last year he survived calls for his removal at the yearly shareholders' meeting.

Sears has been criticised for bumbling into the fiasco of its abortive attempt to sell nearly 400 shoe shops to Stephen Hinchliffe and for selling the Olympus sports business which managed to stage a revival almost as soon as it baled out.

The group is in talks with Littlewoods and possibly others about selling its Freemans mail order operation. Here again tales of gloom have surfaced with stories of any deal being clinched at nearer pounds 300m than the pounds 400m- plus many expect.

Nick Bubb at MeesPierson recently estimated Sears' break-up value at more than 120p. A Selfridges demerger could be worth 45p a share. The shares slipped 2.5p to 91.5p.

Many believe that if Sears fails to show signs of getting its act together this year it will attract a takeover marauder, or be pressured by institutions into demerging or introducing management changes.

The rest of the market had a busy but uneventful session with Footsie up 8.7 points to 4,087.5. The FTSE 250 index continued its recent run with a 10.8 advance to 4,532.3.

Oils were again strong. The majors made further headway but much of the action was concentrated among second-liners with takeover hopes continuing to bubble.

Cairn Energy flared 27.5p to a 443.5p peak. A range of influences was behind the jump. There was talk of a trading link with Shell as well as developments at its Bangladesh operations. Barclays de Zoete Wedd chipped in by urging a switch into Cairn from British Borneo Petroleum Syndicate. Borneo, however, was undaunted, up 85.5p to 938p. HSBC James Capel put a 1,200p target on the shares.

Legal & General added another 5p to 384p but the most compelling insurance story involved Sun Life & Provident, the UK arm of UAP, the French insurer.

The shares returned to market in June when UAP sold 224 million at 235p, retaining a 60.2 per cent interest. The price rose 11p to 274p on rumours UAP was planning to sell its stake, with Prudential Corporation, which has made no secret of its desire to expand, the most likely buyer. Pru gained 3.5p to 500p.

Profit warnings again did the rounds. Capital Corporation, the casino group, fell 5p to 155p (the price was 245p last summer) after reporting profits would come out at up to pounds 9m against hopes of pounds 10m-pounds 11m. And TC, the nursing homes group, tumbled 25p to 114.5p on its warning.

Analysts were busy. Associated British Foods crumbled 17.5p to 462.5p as ABN Amro Hoare Govett said sell to 450p; Henderson Crosthwaite made cautious noises about Reuters, lowering shares 13p to 719.5p, and Glaxo Wellcome retreated 15.5p to 897.5p as NatWest Securities cut profit estimates because of sterling's strength.

Mirror Group improved 6p to 222.5p after Panmure Gordon put a 250p target on the shares. It drew attention to lower newsprint costs and possible circulation benefits from the coming general election.

Northern Foods put on 2.5p to 212.5p following talk of good Christmas trading and hopes for improved milk margins; the milk prospect also helped Unigate 9p up to 439p.

Wickes, the do-it-yourself chain, remained in the doldrums. Unimpressed by modest director-buying the shares fell sharply with the nil-paid rights crashing 21.5p to 25p.

Alvis, the defence group, moved ahead 7.5p to 137p; it has formed a joint venture for a water jet cutting system.

Lanica Trust, the aspiring mail order business, came down somewhere nearer to earth. After surging from 58p in the summer to 2,050p, the shares have encountered turbulence and were at one time off 425p at 1,400p. But buyers appeared. At the close the price had recovered to 1,800p, down just 25p.

Taking Stock

Merchant Retail, which has displayed interest in AIM-listed A de Gruchy, the Jersey department store, rose 1.5p to 25p after producing an encouraging trading statement. Its Perfume Shop chain lifted Christmas sales by 37.2 per cent and the Joplings department stores managed a 3.3 per cent gain. The group has 32 Perfume Shops and hopes to open 15 this year.

The pounds 3.25m cash-raising exercise by burger maker Whitchurch left Richard Thompson, one of the architects of Caspian, with a 46.31 per cent stake. The shares held at 27.5p.

r Wiggins, the property group, edged ahead 1p to 8.5p. There was talk of planning approvals coming through. NatWest sold 5 million shares, reducing its stake to 3.9 per cent.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
Life and Style
Powdered colors are displayed for sale at a market ahead of the Holi festival in Bhopal, India
techHere's what you need to know about the riotous occasion
Arts and Entertainment
Larry David and Rosie Perez in ‘Fish in the Dark’
theatreReview: Had Fish in the Dark been penned by a civilian it would have barely got a reading, let alone £10m advance sales
Details of the self-cleaning coating were published last night in the journal Science
Approved Food sell products past their sell-by dates at discounted prices
Life-changing: Simone de Beauvoir in 1947, two years before she wrote 'The Second Sex', credited as the starting point of second wave feminism
peopleHer seminal feminist polemic, The Second Sex, has been published in short-form to mark International Women's Day
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable