Outlook: The Lord of creaking GUS needs to get a plan

FOR A proud man like Lord Wolfson, yesterday's profits warning from Great Universal Stores must have really stuck in the craw. It was not the first, as he tried to describe it, but GUS's third in three years. With the shares at their lowest point since 1993, the City is beginning to ask serious questions about this company. The threat of takeover and an early exit for the Great Lord can no longer be ruled out.

Lord Wolfson didn't help his cause by treating analyst's questions with barely disguised contempt. Some now feel he has no strategy to put the creaking ship back on course. The root of the problem is more than just the retail malaise. Management has been slow to realise the threats to its existing businesses and equally slow to take advantages of other opportunities such as the Internet.

Though Lord Wolfson should be congratulated for the acquisition of the Experian financial information business, he has spent the last few years loftily waving away City fears that GUS's home shopping business is in structural, long-term decline. His own figures now reveal that the doomsayers were right.

Five years ago only 20 per cent of GUS shoppers had a credit card. Now the figure is over 50 per cent and rising. Consumer no longer need to put up with high catalogue prices to a gain access to credit. They can pick up the plastic and shop at the new breed of discounters like Matalan and New Look instead.

The plan is to push consumers towards the new Argos Additions catalogue and cut costs at the old agency business faster than the decline in sales. But with the core home shopping business possibly plunging into loss next year that might be difficult.

The other conundrum is why this company has been so slow to take advantage of e-commerce activities. With its huge call centre, delivery network and credit checking strengths, GUS should have be at the forefront of e-commerce opportunities. It could also have used the internet to target a younger, wealthier customer base than its typical cash-strapped shopper. In spite of being one of the first UK retailers to have a transactional website (ShoppersUniverse four years ago) it has allowed itself to be outmanoeuvred by rivals. It looks like a long haul back to respectability.

Suggested Topics
PROMOTED VIDEO
News
ebooksNow available in paperback
News
videoJapanese prepare for the afterlife by testing out coffins
Arts and Entertainment
Harrison Ford attends Blade Runner at Target Presents AFI's Night at the Movies at ArcLight Cinemas on 24 April, 2013 in Hollywood, California
film... but Ridley Scott won't direct
Sport
Hughes is hit by a bouncer from Sean Abbott
cricketStephen Brenkley on batsman's tragic flaw that led to critical injury
Sport
Dejected England players applaud the fans following their team's 3-0 defeat
football

Extras
indybest
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

Langley James : IT Support; Helpdesk, VMware; Manchester, £18k

£16000 - £18000 per annum: Langley James : IT Support; Helpdesk, VMware; Manch...

h2 Recruit Ltd: Business Development Manager - HRO - £70k+ ote

£35000 - £450000 per annum + £3k car, £70k ote: h2 Recruit Ltd: Do you want to...

Citifocus Ltd: Newly Qualified Accountants - Risk Mgmt

£Attractive Package: Citifocus Ltd: Prestigious financial institution seeks to...

Citifocus Ltd: Operational Risk Analyst

£Negotiable: Citifocus Ltd: Experienced operational risk professional with ban...

Day In a Page

Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?
Nightclubbing with Richard Young: The story behind his latest book of celebrity photographs

24-Hour party person

Photographer Richard Young has been snapping celebrities at play for 40 years. As his latest book is released, he reveals that it wasn’t all fun and games
Michelle Obama's school dinners: America’s children have a message for the First Lady

A taste for rebellion

US children have started an online protest against Michelle Obama’s drive for healthy school meals by posting photos of their lunches
Colouring books for adults: How the French are going crazy for Crayolas

Colouring books for adults

How the French are going crazy for Crayolas
Jack Thorne's play 'Hope': What would you do as a local politician faced with an impossible choice of cuts?

What would you do as a local politician faced with an impossible choice of cuts?

Playwright Jack Thorne's latest work 'Hope' poses the question to audiences
Ed Harcourt on Romeo Beckham and life as a court composer at Burberry

Call me Ed Mozart

Paloma Faith, Lana del Ray... Romeo Beckham. Ed Harcourt has proved that he can write for them all. But it took a personal crisis to turn him from indie star to writer-for-hire
10 best stocking fillers for foodies

Festive treats: 10 best stocking fillers for foodies

From boozy milk to wasabi, give the food-lover in your life some extra-special, unusual treats to wake up to on Christmas morning
Phil Hughes head injury: He had one weakness – it has come back to haunt him

Phil Hughes had one weakness – it has come back to haunt him

Prolific opener had world at his feet until Harmison and Flintoff bounced him
'I have an age of attraction that starts as low as four': How do you deal with a paedophile who has never committed a crime?

'I am a paedophile'

Is our approach to sex offenders helping to create more victims?
How bad do you have to be to lose a Home Office contract?

How bad do you have to be to lose a Home Office contract?

Serco given Yarl’s Wood immigration contract despite ‘vast failings’
Green Party on the march in Bristol: From a lost deposit to victory

From a lost deposit to victory

Green Party on the march in Bristol
Putting the grot right into Santa's grotto

Winter blunderlands

Putting the grot into grotto
'It just came to us, why not do it naked?' London's first nude free runner captured in breathtaking images across capital

'It just came to us, why not do it naked?'

London's first nude free runner captured in breathtaking images across capital