Jessops, the troubled photographic retailer, suffered a new blow yesterday when its chief executive tendered his resignation just two weeks after the departure of the group's finance director. The company, which has lost more than 90 per cent of its market value over the past year, said Chris Langley would step down at the end of November. The head of finance, Ian Harris, quit earlier this month.
Until Jessops is able to appoint a successor to Mr Langley, the veteran retailer David Adams – now serving as the company's executive chairman – will take on a more active management role. Mr Adams, a former House of Fraser executive, will attempt to drive forward the company's recovery plan by selling old stock, closing stores and reducing costs.
Jessops, which has issued three profits warnings in 12 months, said in a trading update yesterday that its restructuring was on track, although it admitted it had found a further £1.8m of stock to be cleared, in addition to the £15.2m already identified.
Earlier this year, the company arranged new banking facilities with HSBC, which gave it until the end of 2008 to restructure. Jessops will close 81 stores and shed jobs at its support centre as it attempts to cut its losses. These are expected to be £7.5m this year, in line with estimates given in June.
The company has been hit by the growth in digital photography, which has reduced demand for older format cameras, as well as a greater focus on the sector by other high street retailers and supermarkets. Mr Adam believes Jessops can be repositioned as a specialist provider, offering more expert and impartial advice than other stores, as well as a wider product range.
Jessops shares rose by 3.5p to 12.25p yesterday, with analysts concluding that the progress announced in the trading update outweighed the negative impact of further management upheaval.
ABN Amro said the company's net debt at the end of 2007 would be about £50m, down from its previous forecast of £58m, after the retailer reported that improving margins were offsetting falling sales. "While the company must now find permanent replacements for both its chief executive and finance director, ultimately it is on track with its plans," ABN's analysts said last night.
"Restructuring is on track and we expect the market to remain tough. This statement should improve sentiment on a stock most have given up for dead," added a spokesman for Panmure Gordon.
However, Jessops conceded that its performance at Christmas remained crucial, saying Mr Langley would finalise plans for the festive trading period before he left the company.