Millstone round Upton's neck

The Investment Column

Shareholders in Upton & Southern, the north of England department store group, must rue the day their company alighted upon the Reject Shop.

Since Upton acquired the unfortunately named furniture and housewares group in March last year, the company has become embroiled in legal action with Reject Shop's former directors over the purchase and mounted a rescue rights issue - while the shares have slumped from 65p to yesterday's 3.75p.

Yesterday the picture was not looking much rosier. Results for the six months to January show group losses of £987,000 before tax on sales of £20.7m. The Reject Shop remains a millstone around the group's neck.

Losses at the chain reached £1m in the six months on sales of £15.8m and the tide of red ink is expected to continue into the second half. Three stores have been closed and two have been re-opened under the slightly more upmarket but smaller RJ's Homeshop format.

Upton's chairman and chief executive, Ron Trenter - who joined last month from Texas Homecare - describes the business as "in intensive care".

It must now perform radical surgery. Costs will be cut, loss-making stores may be closed or re-branded as RJ's. The group's warehousing and distribution methods will also be reviewed and the introduction of electronic point of sale systems - initiated only last week - should improve cost control.

Current trading is 20 per cent ahead of last year, but the performance is patchy across the 31 stores and most of the gains are coming from lower- margin furniture sales.

A gambler might say that Upton has now left the worst behind it, with scope now to recover. But the shares must remain only for the brave.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: £20000 - £25000 per annum + c...

Recruitment Genius: Account Handler - Personal Lines

£20000 per annum: Recruitment Genius: This provider of insurance and financial...

Recruitment Genius: Graduate Developer / IT Support Engineer

£16000 - £25000 per annum: Recruitment Genius: This fast growing financial ser...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...

Day In a Page

Solved after 200 years: the mysterious deaths of 3,000 soldiers from Napoleon's army

Solved after 200 years

The mysterious deaths of 3,000 soldiers from Napoleon's army
Every regional power has betrayed the Kurds so Turkish bombing is no surprise

Robert Fisk on the Turkey conflict

Every regional power has betrayed the Kurds so Turkish bombing is no surprise
Investigation into wreck of unidentified submarine found off the coast of Sweden

Sunken sub

Investigation underway into wreck of an unidentified submarine found off the coast of Sweden
Instagram and Facebook have 'totally changed' the way people buy clothes

Age of the selfie

Instagram and Facebook have 'totally changed' the way people buy clothes
Not so square: How BBC's Bloomsbury saga is sexing up the period drama

Not so square

How Virginia Woolf saga is sexing up the BBC period drama
Rio Olympics 2016: The seven teenagers still carrying a torch for our Games hopes

Still carrying the torch

The seven teenagers given our Olympic hopes
The West likes to think that 'civilisation' will defeat Isis, but history suggests otherwise

The West likes to think that 'civilisation' will defeat Isis...

...but history suggests otherwise
The bald truth: How one author's thinning hair made him a Wayne Rooney sympathiser

The bald truth

How thinning hair made me a Wayne Rooney sympathiser
Froome wins second Tour de France after triumphant ride into Paris with Team Sky

Tour de France 2015

Froome rides into Paris to win historic second Tour
Fifteen years ago, Concorde crashed, and a dream died. Today, the desire to travel faster than the speed of sound is growing once again

A new beginning for supersonic flight?

Concorde's successors are in the works 15 years on from the Paris crash
I would never quit Labour, says Liz Kendall

I would never quit party, says Liz Kendall

Latest on the Labour leadership contest
Froome seals second Tour de France victory

Never mind Pinot, it’s bubbly for Froome

Second Tour de France victory all but sealed
Oh really? How the 'lowest form of wit' makes people brighter and more creative

The uses of sarcasm

'Lowest form of wit' actually makes people brighter and more creative
A magazine editor with no vanity, and lots of flair

No vanity, but lots of flair

A tribute to the magazine editor Ingrid Sischy
Foraging: How the British rediscovered their taste for chasing after wild food

In praise of foraging

How the British rediscovered their taste for wild food