Outlook: Storehouse

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The Independent Online
PETER SALSBURY, the new chief executive at Marks & Spencer, might feel as if he has the whole world on his shoulders at the moment but if he fancies a chat with someone in a similar hole, he could do a lot worse than meet up for a few drinks with Keith Edelman.

The chief executive of Storehouse is in a pit so deep it is threatening to engulf him. After five years in the hot seat he is staring at a share price that has underperformed the market by more than 70 per cent, while sales and profits are heading south at a rate of knots.

However, there is a key difference. While M&S has admitted responsibility for its failings, Storehouse is still blaming other factors. The main culprit is the clothing market in general, it says, and the childrenswear market in particular, which is being hijacked by the likes of Gap and Asda's George range. Also getting a kicking is the pervious management - those wretches David Dworkin and Ann Iverson starved the business of investment for too long.

Mr Edelman's regime has not been entirely without its successes. Yesterday's collapse was the first fall in profits for seven years. Earnings and dividends are ahead by 50 per cent and 80 per cent on five years ago. But chief executives are judged by their share price and Mr Edelman's tells its own story.

Belatedly there is action. Bhs is being re-structured with new buying departments and greater accountability. At Mothercare the plan to focus on the larger Mothercare World stores looks sensible too.

Even so, the better parallel is perhaps not so much with M&S but with Sears, a company that promised much but singularly failed to deliver. Storehouse too could become the target of a break-up bid. There may be value in there for a bargain hunter like Philip Green, the Sears raider. One thing is clear, the market will not stand for much more of this.