Outlook: Rose throws out the kitchen sink

JUST WHEN everyone thinks it can't possibly get any worse at Booker, it does. Never a company to let a month drift by without a profits warning, the hapless cash-and-carry group treated the market to a corker of a stock exchange announcement yesterday. It had just about everything.

There was the scrapping of the dividend, the pointed remarks about "overoptimistic expectations" by previous management, a boardroom departure, the threat of job cuts and even the possible breach of its banking covenants. It was a full "kitchen sink" job.

And perhaps this is the point. Stuart Rose has only been Booker's chief executive for about six weeks. Like a new manager at a football club, he has the opportunity to size everything up, decide what he doesn't like and justifiably throw it overboard while blaming it all on his predecessors. Coming this early in his tenure, Mr Rose cannot be held responsible for a further plunge in profits.

Even so, the scale of it is quite breathtaking and questions must be asked about why the market was not alerted before. It is only a matter of weeks since Jonathan Taylor, the erstwhile Booker chairman, was insisting that there was no black hole in Booker's accounts and that the company was not in danger of breaching its banking covenants. He was speaking after first Somerfield and then Budgens had run away from the idea of merging with Booker. Neither company said exactly why it had taken fright, but the implication in at least one case was that something nasty had been found in the woodshed.

Trading has undoubtedly got tougher in the last few weeks, as retailers such as Marks & Spencer and Boots have said, but surely not by this scale of magnitude.

All of this leaves Booker in a pretty sorry state. It has just two executive directors, and a business that seems to be heading south at a rate of knots. Mr Rose is faced with the task of exiting a number of businesses while trying to revitalise the core chain. After this long in the doldrums and dogged by takeover and merger speculation, divisional management must be completely demoralised.

But as this column has argued before, Mr Rose ought to be able to do something with a business with sales of more than pounds 5bn. The previous management invested heavily in the business in their final years, and barring a collapse in consumer spending, that should start to pay off. But it will be a long road back and if there are any upsets from now on, Mr Rose will have no one else to blame.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

A timely reminder of the bloody anniversary we all forgot

A timely reminder of the bloody anniversary we all forgot

Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
Homeless Veterans appeal: Former soldiers pay their respects to a friend who also served

Homeless Veterans appeal

Former soldiers pay their respects to a friend who also served
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

Scarred by the bell

The downfall of the TV star charged with bar stabbing
Why 2014 was a year of technological let-downs

Why 2014 was a year of technological let-downs

Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

Will revolutionary Cuba take 'bourgeois' golf to its heart?

Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
The Locked Room Mysteries: As a new collection of the genre’s best is published, its editor Otto Penzler explains the rules of engagement

The Locked Room Mysteries

As a new collection of the genre’s best is published, its editor explains the rules of engagement
Amy Adams on playing painter Margaret Keane in Tim Burton's Big Eyes

How I made myself Keane

Amy Adams hadn’t wanted to take the role of artist Margaret Keane, because she’d had enough of playing victims. But then she had a daughter, and saw the painter in a new light
Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Parting view of Ofcom chief... we hate jokes on the disabled

Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog, Ed Richards
A look back at fashion in 2014: Wear in review

Wear in review

A look back at fashion in 2014
Ian Herbert: My 10 hopes for sport in 2015. Might just one of them happen?

Ian Herbert: My 10 hopes for sport in 2015

Might just one of them happen?
War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?