The decision to call off the five-month search to replace Keith Edelman has been forced on Storehouse after a number of leading retail figures turned down the chance to take on the challenge.
Chairman Alan Smith is also expected to announce that Mothercare, which has 300 stores and 6,000 employees, will be spun off into a separate company. Storehouse would then comprise the 150 Bhs stores, which employ 14,000. Splitting the businesses will mean Storehouse can bypass the thorny question of finding a new chief executive acceptable to its shareholders.
The announcements are expected on Thursday, when the company will reveal that it has fallen into the red for the first time in its history. Storehouse warned of poor trading in a statement at the end of September, and its losses are expected to exceed pounds 15m.
Mr Edelman, who joined Storehouse from Carlton in 1993, departed in May with a pounds 600,000 pay-off.