Tie Rack eyes return to profit as its boss quits

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The Independent Online

The chief executive of Tie Rack is quitting despite the fashion accessories retailer saying it was close to returning to profitability after years of losses.

Corrado Colli is leaving the company tomorrow after three years at the helm. Tie Rack, which has 300 stores in 24 countries, said he had taken another job in Italy to be closer to his family because he was tired of commuting to and from its office in London.

Cesare Peretti, an executive director of Tie Rack, said it had a "very good" shortlist of candidates to replace Mr Colli and would make a decision within four weeks.

Tie Rack, which comprises the eponymous chain and the Rolling Luggage and Naturally Cashmere operations, has not made an operating profit since 2004-5, according to Retail Knowledge Bank. In its latest accounts filed at Companies House, Tie Rack Retail Group made a pre-tax loss of £6.54m for the year to 1 February 2009. Turnover fell 12 per cent to £65.58m, which it blamed on the "impact upon consumer confidence of the global recession". Robert Clark, a senior partner at Retail Knowledge Bank, said: "It is fair to say Tie Rack has underperformed in the UK."

However, Mr Peretti recently claimed the group's performance had improved significantly, saying it would be "close to break even" for the year to 1 February 2011. He said the new owners of Tie Rack had invested heavily in the price and quality of its products, backed by a rise in marketing spend. "We are seeing the results of the turnaround strategy and the big investment we have made in Tie Rack," Mr Peretti said.

He claimed its UK business was "booming" and that like-for-like sales were up by between 35 per cent and 40 per cent this year. Tie Rack is aiming at a turnover of between £65m and £70m in the year to February, compared with £58m in 2009-10.

Marcello and Corrado Fratini, who own the Fingen retail and property empire in Italy, bought 70 per cent of the share capital of Tie Rack in April 2007 and the remaining shares last year.