Rose returns to fashion giant

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The Independent Online

Arcadia, the struggling high street fashion retailer, will today announce that Stuart Rose is replacing John Hoerner as chief executive with immediate effect.

Arcadia, the struggling high street fashion retailer, will today announce that Stuart Rose is replacing John Hoerner as chief executive with immediate effect.

Mr Rose, 51, will start his new role at Arcadia today after dramatically quitting his job as chief executive of Iceland just months after overseeing its merger with Booker, the cash & carry chain.

His departure means that Malcolm Walker, Iceland's founder, will return to his combined role of chairman and chief executive of the frozen food retailer. He had been due to step back to become non-executive chairman next spring.

Mr Walker, 54, is said to be "furious" with Mr Rose's decision feeling he has reneged on a deal to see through the integration of Iceland and Booker.

Mr Walker said from home yesterday: "My kids have all had a gap year and I fancied having one. But the good news is that I've got my job back and I am looking forward to getting stuck in."

The shake-up will mark an emotional return to Arcadia for Mr Rose, who left what was then called the Burton Group three years ago having missed out on a senior appointment when the company de-merged the Debenhams department store business. He has since led a nomadic existence, being linked with the chief executive position at WH Smith in 1997 before being appointed chief executive of Argos to help it defend a hostile takeover from Great Universal Stores. Though Argos lost the fight to a £1.9bn bid, Mr Rose was seen as having marshalled a good defence and was rewarded with the chief executive position at Booker.

But Mr Rose's heart was always said to be in fashion. He said yesterday: "I've gone back to where I feel comfortable. I'd like to see my time out [at Arcadia]."

Mr Rose will receive an annual salary of around £500,000, similar to his Iceland package. He will also be rewarded a potentially lucrative share option package. It is thought Mr Rose will look at reducing the number of formats in the Arcadia portfolio. This could lead to further store closures.

The changing of the guard at Arcadia also marks the end of a 13-year spell at the former Burton group for Mr Hoerner, who is one of the best-known figures in UK retailing. Mr Hoerner, 61, became chief executive of Debenhams in 1987 and was then made chief executive of the Burton Group in 1992 when he led a rescue rights issue. But his spell at Arcadia has seen a calamitous decline in Arcadia's fortunes culminating in the announcement of a ££153m full year pre-tax loss last month. Arcadia's stock market value is now just £91m.

The company, which owns mass-market chains like Burton Menswear, Dorothy Perkins, Miss Selfridge and Top Man, has been caught in the same mid-market battleground that afflicted Marks & Spencer. It has sales of almost £2bn but its weak brands have been hit a squeeze on prices. Mr Hoerner's decision to buy the Sears womenswear brands from retail entrepreneur Philip Green was heavily criticised. The group is in the process of closing 455 of its 1,800 stores.

The Nebraskan-born Mr Hoerner is not expected to seek another chief executive position but is keen to stay in business and will remain in Britain. Friends of Mr Hoerner's were yesterday saying that he is comfortable with Mr Rose replacing him. One said: "John feels the company is on a firm footing for recovery with positive results arising from the Brandmax strategy. The timing couldn't be better for him to retire."

Mr Hoerner has a 12-month contract and will receive compensation of around £550,000. He owns a million Arcadia shares.