Investors raise pressure on Ash to quit as Hamleys chief

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The Independent Online
HAMLEYS, the troubled toy retailer, is considering removing its chief executive Chris Ash within weeks, in a bid to quell investors' anger at the company's dismal performance.

Mr Ash is coming under growing pressure to resign to take responsibility for Hamleys' disappointing sales and underperforming share price.

Howard Dyer, the company's powerful chairman, is already sounding out potential replacements for Mr Ash, who was appointed to the toy group in October 1997. The chief executive's chances of staying at the helm hinge on the final results, due to be announced later this month.

Insiders said yesterday that unless the figures showed signs of a turnaround in the trading performance at the company's flagship Regent Street store and Toystack mass market chain, Mr Ash was likely to be axed. "Chris is still there now, but the group hasn't been performing and needs to improve," a source said.

Hamleys' large shareholders, which include M&G, Prudential and Jupiter, are growing restless about the underperforming share price. "The institutions are on the phone to Howard telling him to do something about it," the source said.

The share price fell to an all-time low of 99p in October after the company revealed a near-50 per cent slump in first-half profits. The profit collapse was caused by an embarrassing information technology blunder that pushed Toystack into a loss. The Regent Street store was also hit by lower tourist spending.

Despite a slight recovery in the past few weeks, the stock, which closed at 131.5p on Friday, has underperformed the market by nearly 60 per cent in the past 12 months. At the time of the interim results, Mr Dyer said the profit shortage would not be made up in the second half, triggering a raft of earnings downgrades.

Hamleys further knocked investors' confidence in January when it reported disappointing sales at Toystack in the run-up to Christmas, traditionally its busiest period.

Analysts forecast a 1998 profit of pounds 6m, down from pounds 7.5m.