Lord MacLaurin takes on the jean machine

COMMENT: `Levi's is rattled. Its stylised advertising has persuaded generations of teenagers to pay top-dollar for an image as much as an item of clothing. Price competition could bring the cosy set-up crashing down'
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It was only a matter of time before a supermarket began selling that ultimate icon of classless, late 20th century fashion, Levi 501 jeans. It was inevitable that the chain in question should be Lord MacLaurin's Tesco, the trend-setter in so much of the retail revolution that has blown through the high street. It goes without saying that hefty price cuts would be involved. And it was utterly predictable that Levi Strauss & Co would cry foul.

Its jeans, as they say, are shrunk to fit, but not on to supermarket shelves alongside the loo rolls and dried pasta. Where are the staff trained in the art of selling "jeanswear"? Where is the groovy music? And where, more to the point, are the margins? Levi's has no desire to set retail prices, no siree, but if everyone goes around knocking pounds 25 off the price of its best stonewashed denims then where will it all end?

It should prove an interesting battle. The supermarkets have successfully targeted books, over-the-counter medicines, petrol and compact discs. You can bank with them, you can buy on credit with them and, if your taste in shopping runs to the Co-op, you can literally go from the cradle to the grave with them.

But Levi jeans are different. As the discount supermarkets discovered a couple of years back when they tried to sell posh perfumes at half price, hell hath no fury like the fragrance house that sees its brand being devalued.

Jeans, however, are different, or at least they ought to be, and Levi's defences could prove shaky. If it takes a diploma in "jeanswear" to sell a pair of 501s then why can they be bought by catalogue? The answer is because Littlewoods and Freemans charge pounds 54.99 for a pair of mail order 501s compared with the pounds 52 charged at the official Levi's Store in Regent Street.

Tesco is now proposing to knock them out for pounds 30 a throw and still make a pounds 5 profit. It would like to sell a range of styles at different prices - another of Levi's pre-conditions. But the only consignment it has so far been able to get its hands on is a shipment of 45,000 pairs of stonewashed red, black and yellow, button-up fly, 501s from a supplier in Mexico.

You can see why Levi's is rattled. Its stylised advertising has persuaded generations of teenagers to pay top-dollar for an image as much as an item of clothing. Levi Strauss has lived high on the hog but price competition could bring the whole cosy set-up crashing down. A nation of parents will be cheering Lord MacLaurin on from the sidelines.

Strong is selling from a weak position

This time it is curtains for Liam Strong. Definitely maybe. The chief executive of Sears has survived so many close shaves that if he is finally pushed out of the stores group he would surely get a job with Victor Kiam. Can Mr Strong survive the latest setback, the collapse of his plans to sell Sears' mail order business, Freemans, to Sir David Alliance's N Brown group?

Logically, the answer ought to be no. He originally planned to sell the business to Littlewoods but when Littlewoods discovered he was also negotiating with N Brown it pulled out in disgust.

Now Mr Strong is back in talks again with, er, Littlewoods. The negotiations are described as "exclusive", a redundant phrase since Littlewoods is now the only buyer in town.

Given that it is a buyer's market, it is hard to see how Mr Strong can persuade Littlewoods to part with the pounds 395m it had originally offered to pay for the business back in January. He could of course walk away if the price is too low, but that would mean tearing up his plans to hand the proceeds back to shareholders.

He could strike a deal at a lower price. But even if he agrees to that, the sale will almost certainly head straight for the Monopolies and Mergers Commission. Depending on what conditions were imposed, the MMC could either force the price down still further or prove a show stopper altogether.

After the fiasco of Sears' abortive sale of its shoe shops to Stephen Hinchliffe, Mr Strong cannot afford another failure. There was plenty of bluster on offer yesterday. Perhaps Littlewoods will cough up after all. Perhaps the shoe business will recover. Perhaps the moon is made of green cheese.

If there is a grain of consolation, it is the fact that Sears has lost the capacity to disappoint - hence the indifferent reaction in the share price.

But Mr Strong is running out of room. He has a dwindling band of supporters in the City but even they must surely be losing patience.

Final whistle blown on City's latest fad

As excuses for not floating go, the absence of full-time paid executives is as spurious as they come. That, however, was the official line at Sheffield Wednesday yesterday - it was the newest reason for staying private from what claims to be the country's oldest club.

What the spin from Hillsborough was studiously avoiding was an admission that the cold shoulder given to Charlton Athletic last week - its shares collapsed from the 80p offer price to 56.5p at one point on the first day's dealings - had blown the final whistle on soccer's flirtation with the City.

Football's flotation frenzy has followed a similar pattern to a string of new issue fads in recent years. Improving fundamentals - in this case rising attendances and a game awash in TV cash - paved the way for early successes, tempting others to follow suit and all the time reducing the quality of the companies on offer until investors finally baulked.

Last year it was hoteliers who caught the stock market bug with high- quality offerings like Millennium & Copthorne beating a path for less blue-chip peers like Thistle and Jarvis to follow. By the time investors starting running their slide rules over little Principal Hotels, share prices were dipping below their issue prices and the float was pulled.

The previous year belonged to the Internet when the dramatic success of Netscape's flotation - dealings were expected to start at $13, instead they hit $50 - meant anything with the words Net, Web, information or superhighway in the prospectus could, for a short period, earn a favourable hearing. Three years ago the construction sector rode that industry's false dawn but within weeks ran out of steam.

In any industry there are only a limited number of companies with the qualities to make them stand out as an investment from their peers. In football, however, the shortage is unusually acute. Even in the stock market's sillier moments, no one would pretend Charlton's and Manchester United's brand strength, quality of earnings and growth potential are remotely comparable. The Owls realised the game was up for them for now, even though they couldn't quite bring themselves to express it in quite those terms.

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