The lamentable record at the House of Fraser department store group finally took its toll yesterday when the group's managing director, Andrew Jennings, was forced out by the non-executive directors.
His departure, with immediate effect, follows a period which has seen House of Fraser issue four profits warnings in its two years as a public company. Separately, merchandise director Rebecca Sharp is to leave just four months after joining. She is leaving of her own volition to take a job in Italy.
Mr Jennings joined House of Fraser in 1992. He was on a salary of pounds 270,000 a year and had a one year contract. He also holds 440,000 share options at 180p, which become exercisable next year.
The chairman, Brian McGowan, is to take over the day-to-day running of the Dickens & Jones and Army & Navy group until a new managing director is appointed. Mr McGowan's own position has been under threat after he staked his reputation on the company's success.
Speculation has been rife that the former Storehouse chief executive, David Dworkin, is in line for Mr Jennings' position. The company said yesterday that it had had no communication with Mr Dworkin. "We will consider anybody qualified for the job. The main priority is to spend time getting it right," a spokesman said.
The market reacted with relief that some change had at last been effected. The shares jumped 11p to 188p compared with the 180p issue price two years ago.
John Richards at NatWest Securities said: "House of Fraser is one of those companies that had got to the stage where any change would be decreed as good news."
Tony Shiret at BZW said the market had over-reacted to the management changes. "The shares are still overvalued. They need a credible replacement as chief executive and the performance has to improve."
Institutions had expressed concern about the performance of the company, though it is thought they had not exerted direct pressure for boardroom changes. One institutional shareholder said: "The board has probably done the right thing. The record has obviously been very disappointing."
House of Fraser's non executive directors include Ian Martin, the chairman of Unigate, who also heads the UK division of Kohlberg Kravis Roberts, the leveraged buyout specialists.
House of Fraser came to the stock market with great fanfare in April 1992. The well known department store names and the presence on the board of Mr McGowan, the former Williams Holdings star, lured in more than 100,000 private investors. But the company has been beset by problems ever since. Its buying and stock control has been poor, resulting in drastic discounting, which has affected margins.
The final straw for management was the latest profits waning in January. The company said a good Christmas had not been enough to make up for a grim autumn when stores were left with vast stocks of unsold coats and winter garments.Reuse content