Liam Strong, the chief executive, who is under growing pressure from large shareholders to resign or institute a break-up of the sprawling group after last week's profits warning, is pinning his hopes that spring ranges shortly to be launched by new management can still revive the fortunes of the British Shoe Corporation operation.
Management, led by BSC managing director Rebecca Cotterell, have been told they have until the summer to prove that new systems, improved formats and customer service put in over the past year can produce results or the business will be disposed of.
But Mr Strong's hand may be forced if the collapsing share price, which at 88p on Friday is near recent lows, prompts a break-up bid for the company. One report over the weekend claimed that millionaire entrepreneur Richard Caring was putting together just such a bid with German mail order group Otto Versand, which lost out with the lowest offer in the recent auction of Sears' Freemans mail order business.
Mr Strong, who is expected to announce the sale of that operation for around pounds 375m to Littlewoods early this week, is understood to have the backing of his board, headed by non-executive chairman Sir Bob Reid, in setting his face against whole- sale demerger for now.
One insider said yesterday: "A huge amount of change and restructuring has gone on and spring is the first time we will see ranges from the new management put in in December 1995. This will be critical to see what the potential of the shoe business is going to be.
"So the great shout that Sears is going to sell the shoe business is not right, because we have got to see what is going to happen. But it would be wrong to exclude the possibility if it doesn't perform."
A demerger would be considered if the rationale could be shown to be "very good", the source said.
Even so, the City is likely to remain sceptical about Mr Strong's ability to turn around the UK shoes business, now encompassing Shoe Express, Shoe City, Dolcis and a chain of department store concessions, which saw profits slump from pounds 2m to just pounds 600,000 in the six months to July. One analyst said yesterday: "I'm not sure whether new ranges are enough to shift perceptions of the business. Essentially it's a replacement market: the number of shoes per head bought is low."
She expressed doubts whether a management whose background was in clothing was the right team to revive a shoes business.
Opinion amongst Sears' major shareholders about Mr Strong's future is still not clear-cut in the wake of the profit warning.