The Thing Is: 'GUS was viewed as a fuddy-duddy company with a lot of different parts'
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The Independent Online

GUS has had more image changes in its 103-year history than Madonna.

GUS has had more image changes in its 103-year history than Madonna.

It has bought and sold businesses at a rapid rate, although it was never as glamorous as the Material Girl. "[At the turn of the century] GUS was viewed as fuddy-duddy conglomerate with a lot of different parts," says John Peace, who became chief executive in 2000. "The most important thing to do was to bring a strategy to the group and focus on the growth businesses."

He has certainly been busy getting rid of unwanted items. Last week he sold GUS's catalogue business for £590m, including Kays and Great Universal, to the secretive Barclay Brothers. Last year Mr Peace did a partial sale of Burberry, the luxury goods group best known for its beige check design, and next year he intends to sell part of GUS's South African retail business, first bought in 1949.

The company has wound down or sold off its car loans businesses, and there is increasing speculation over the future of Experian, the data provider that does credit checks for banks and car insurance checks for the police. Meanwhile, GUS is slowly selling off its property portfolio.

Mr Peace worked in GUS's information division for most of his career, and denies there are plans to sell it, although he does not rule it out in the long term.

After all this, you might think the company will have no businesses left, but there is also the Argos retail chain and the DIY retailer Homebase, which it bought last year for £900m.

To those who say there are few synergies between the businesses, Mr Peace would disagree. Argos and Homebase have a stronger supply chain when working together, he says. Argos's home delivery service is likely to be duplicated at Homebase, and they can share the infrastructure needed. They both use Experian to check out customers for loan services.

Now the strategy is to focus on these three growth businesses, says Mr Peace, although the long-term future is less clear. "We have an open mind on what the shape of the group will be. What we have got to do is make sure we actually get returns from the investments we have made."

He doesn't rule out the possibility that the current businesses could be sold and a different one bought. "You can see how much flexibility we have created," he says. GUS is free to try on several more outfits before it decides on its style.