Lifestore faces axe as Green plots fresh offer for Marks & Spencer

Stuart Rose, the new chief executive of Marks & Spencer, is preparing to ditch Lifestore, the retailer's ill-fated foray into stand-alone homeware stores.

Stuart Rose, the new chief executive of Marks & Spencer, is preparing to ditch Lifestore, the retailer's ill-fated foray into stand-alone homeware stores.

Unpublished figures, obtained by The Independent on Sunday, show the concept, launched by the recently ousted Vittorio Radice, is missing internal sales targets by up to 27 per cent. The figures are understood to have convinced Mr Rose that Lifestore in its current format has no role to play in his plans for the turnaround of M&S. He is therefore keen to pull the plug on the £14m experiment as soon as possible.

The news comes as billionaire retailer Philip Green and his advisers meet tomorrow to discuss how to structure any revised offer for M&S. Specu- lation had been growing that Mr Green, who had his first approach knocked back by former chief executive Roger Holmes, was preparing to walk away from the deal after apparently failing to win over the City.

But an insider said: "Philip does things differently but don't think for a minute that he doesn't know how to do this. Funding the bid is not the problem. What is under discussion is what price makes sense and how do you structure the bid. There are quite a lot of people still interested in the [equity] stub."

However, Mr Rose's appointment has been well received in the City. The former Arcadia boss has a good reputation and has set about introducing changes. Mr Rose is reviewing all M&S's operations. Despite taking a dim view of Lifestore, he believes that the company should still sell homeware in some guise.

Some shareholders back the move to pull the plug on the Lifestore concept. Said one: "It probably has got to go. The man who's created it has gone and there's no room for it."

A retail expert said that although Mr Rose would not be able to claw back the costs spent on Lifestore, it would be "symbolic" of the new management's intentions.

Lifestore was opened in February amid much publicity. It has one large out-of-town store in Gateshead, with another due to open in Kingston later this summer. It is understood that Mr Rose will continue with the Kingston opening, but could change the format at a later date.

Any changes that Mr Rose introduces are intended to help defend the company against Mr Green's spurned overtures. It is thought Mr Green will tomorrow discuss the possibility of increasing the cash element of any potential bid.

A new value has not been discussed, although one insider said a recent decision by a leading M&S shareholder to sell a percentage of its holding was telling.

Brandes Investment Partners, the retailer's biggest shareholder, sold several million shares over recent days, while the share price has hovered just about 360p. Mr Green has offered between 290p-310p a share in cash plus 25 per cent in the new company.

San Diego-based Brandes holds various stakes in a range of UK companies and is well known as a value investor.

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