Outlook: A long haul ahead for Sears

It would be nice to think that Sears' exit from shoe retailing after 75 years finally closes the door on a long and sorry chapter but with a group as accident-prone as this you can never be sure.

Its chairman, Sir Bob Reid, who took to running a retail empire with all the aplomb one would expect of a former head of British Rail, describes the decision to close or sell all 775 shoe outlets as a "value realisation plan".

These are the kind of phrases dreamt up by company doctors like David James, who was brought in to sort out the shoe business after the demise of the former chief executive, Liam Strong. Unfortunately, Mr James' prescriptions, like his fees, tend not to come cheap. The only bit of value realisation visible to the eye yesterday was a pounds 150m extraordinary charge against the whole thing. For the time being Sir Bob is not able to quantify what sort of value he expects to realise from the exercise.

It would be a brave investor who bet there will be no further exceptional charges. Sears' track record when it comes to disposing of shoe shops is not inspiring. Furthermore, the latest plan assumes it will find buyers for more than half the downmarket Shoe Express business as well as Dolcis, Shoe City and Cable & Co.

Even if Sears gets out of shoes without further pain, it is still not out of the woods. It still needs to get clearance from the Monopolies and Mergers Commission for the pounds 370m sale of the Freemans mail order business to Littlewoods. This is not now expected before the end of November.

Beyond that the plan is to float the Selfridges department store group, although it is by no means apparent that Sears will be able to meet its target of next spring. Sir Bob says Selfridges is worth pounds 800m but the entire group, including Freemans and its women's fashion shops, is presently valued at only pounds 100m more than that.

In the space of the last year the shares have virtually halved, in the last six months every bit of the business has gone into reverse and the current trading statement is hardly reassuring given that Selfridges is being dressed up for flotation.

A successful outcome from the MMC would at least allow Sears to throw shareholders the promised morsel of a special dividend from the Freemans proceeds. But it is hard to see the break-up value getting much beyond the current trading price. Funny to think that Sears was once viewed by corporate raiders as the classic asset-stripping play.

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