New Argos chief to collect pounds 10,000-a-day if GUS bid succeeds

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The Independent Online
Stuart Rose, brought in yesterday to spearhead Argos' defence against a pounds 1.6bn hostile bid by Great Universal Stores, stands to collect pounds 540,000 for 60 days' work if the company fails to keep its independence. Nigel Cope, City Correspondent, reports.

Mr Rose will lead the Argos defence in the absence of Mike Smith, the group's chief executive who is seriously ill at home and unable to fulfil his full duties. Argos had to move quickly to fill the void and Mr Rose had the twin benefits of being available as well as highly regarded.

Mr Rose left the Burton Group at the time of the de-merger in July with a pay-off of around pounds 600,000. He was later linked with the chief executive position at WH Smith.

At Argos he will be on a two-year contract with an annual salary of pounds 320,00, plus a supplement of pounds 40,000 and a joining fee of pounds 180,000. His contract states that "if there is a change of control of Argos before 9 February 1999" he will receive one year's salary, plus the pounds 40,000 supplement as well as the joining fee. This means that even if he loses the bid battle, he will have been paid pounds 540,000 - or pounds 10,000 a day - for the 60-day bid period.

"You have to pay the going rate for a retailer with my experience," he said. He added that the salary was not significantly more than he received during his final year at Burton

He said he was looking forward to marshalling Argos' defences though he admitted that he had never fought a bid before. "I'm naturally delighted to be doing the job. I have been waiting for just his kind of opportunity."

Mr Rose, 48, left Burton in July amid reports of a management rift over the de-merger. Mr Rose had been chief executive of Burton's multiples business including Burton Menswear, Dorothy Perkins and Principles. But John Hoerner, Burton's chief executive took the top job at Arcadia, the new name for the multiples business while Terry Green was made head of Debenhams. Mr Rose left with a pay off of pounds 600,000 and has since been doing consultancy work.

Mr Rose had joined the Burton group in 1989. Before that he worked at Marks & Spencer for 12 years.

Analysts welcomed the appointment saying Mr Rose was a proven retailer. Tony Shiret at Credit Suisse First Boston said: "It is obviously a positive move for Argos. He [Mr Rose] was successful at Burton and part of a very good team."

Some analysts questioned Mr Rose's relative lack of experience in home shopping and the "hard goods" sectors in which Argos specialises. However, Mr Rose said he has worked in the housewares and toys sections at Debenhams.

Sir Richard Lloyd, Argos' chairman, said: "We have been talking to Stuart since the extent of Mike Smith's illness became apparent. It is a testament to the strength of the Argos brand and business that he has agreed to joining Argos at this time."

Mr Rose said he was "in it for the long term " and was confident that Argos could defeat the GUS approach. He said he was committed to demonstrating the value of Argos as an independent business. "It is a good business, with a strong brand and a good franchise,." he said.

Outlook, page 21

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