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Outlook: Knotted ties

ROY BISHKO, the perennially upbeat South African who runs Tie Rack, hates it when people call his creation a niche retailer. This, he claims is an outrageous slur on his company, associating it with 1980s implosions like Sock Shop and Knickerbox. Instead he claims Tie Rack is "a specialist retailer" which happens to focus on "neckwear" and other associated items.

This is an interesting distinction. But even if he is right, Tie Rack has certainly established something of a niche for itself of late - that of issuing profit warnings. And though the company does not exactly have the field to itself at the moment, it is looking remarkable accomplished at it, having issued four in a year.

The shares rose a bit yesterday on the return of Nigel McGinley to the chief executive's chair, but the bald fact is that Tie Rack has lost 90 per cent of its value in the last two years. This is a destruction of shareholder value on a truly Olympian scale.

What has gone wrong has been well-chronicled. The company was hit by the strong pound and in particular the slump in Asian economies. Its overweight position in airports suffered with the collapse of business class travel. There were also buying mistakes, which left the group with unwanted stock.

Today the company has a market value of just pounds 15m, even though the business contains pounds 11m of cash. This must be tempting to financial buyers, though the 37 per cent stake held by Vadep, an obscure Swiss investment trust, is obviously a deterrent. The other option is for Mr Bishko to take Tie Rack private himself. But if he tried that at current prices, the City would string him up - probably by using one of his own brightly coloured pieces of specialist neckwear.