Storehouse chief's pay package questioned

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The Independent Online
Storehouse, the retail group which has been plagued by weak sales and a plunging share price, came under fire from shareholders over boardroom pay yesterday. However, the share price surged 9 per cent later in the day following an upbeat trading statement that was made at the meeting.

Alan Smith, chairman of Storehouse, was forced to defend the chief executive, Keith Edelman, after one shareholder questioned his pounds 728,000 pay package in a year during which the shares had fallen by a third and underperformed the retail sector by 30 per cent. "Why does Mr Edelman seem to walk on water?" one shareholder asked. The shareholder also asked why Mr Edelman had received higher bonuses than Sir Richard Greenbury, the chairman of Marks & Spencer, "who has guided that company to a pounds 1bn profit".

Mr Smith responded by saying the company's performance measures were "tough indeed" and that, far from being criticised, Mr Edelman "should be congratulated for the work he has done bringing this company back from the brink of disaster". He said Mr Edelman's total pay had gone down this year "and will go down next year too".

There was better news for shareholders when Mr Smith unveiled the company's trading statement which showed that group sales in the first quarter were 14.5 per cent ahead of the same period last year. Of that total, the additional seven weeks of the Children's World acquisition had added 5.3 percentage points.

The combined Mothercare and Children's World sales were 10.8 per cent ahead while those at BhS were 8.5 per cent up.

Storehouse shares jumped 17p to 205p on the news, having touched a low of 185.5p earlier this month. However, analysts said the company would need to deliver good results more consistently if it was to win over its critics.

John Richards, of NatWest Securities, said: "There is still a lack of credibility with this company and I don't think there is enough in these figures to make a difference. The share price reaction is one of relief really. It's a start but there is still some way to go."

He pointed out that because Storehouse had started its summer sale early some of the sales growth would have been made at a lower margin.

There were lighter moments at the shareholders' meeting in central London yesterday. One shareholder, Henry Grimsdale, asked why his local branch of BhS was still stocking Christmas puddings at Easter. "They were the size of thimbles," he said. Another said her family had held shares in Storehouse since 1928 "and I wonder if there is anyone in the room who has held shares longer?" Mr Smith said he would check and quipped: "At least those should have gone up since then."