Storehouse's shares jumped 7 per cent in response to the news, to close at 118p. Mr Edelman, whose pay-off is expected to be between pounds 500,000 and pounds 600,000, presided over a dramatic collapse in the share price. When he took over in 1993, it stood at 212p. Yesterday, before news of his resignation, the shares opened at 110.5p - a 48 per cent decline.
Alan Smith, the current chairman, will become executive chairman and take responsibility for day-to-day running of the company until a replacement is appointed.
In a Stock Exchange announcement, Mr Smith said: "It was mutually agreed that the time had come for Keith to relinquish his role as group chief executive."
Mr Edelman has come under fire recently, criticised by investors and analysts for a strategy which emphasised cutting costs at the expense of investment and growth.
One analyst said: "The problem's been his failure to increase like-for- like sales. The market's been tough but it's his own internal strategy which is to blame. Hopefully new blood will bring about a new strategy."
Sources close to the company said that Mr Edelman's departure had long been on the cards. "The board has been concerned about the growing credibility gap represented by the weak share price. Following the results announcement last week it was decided that new leadership was required," the source said.
His resignation, which provoked little surprise, was welcomed but analysts pointed out that the company's fundamental difficulties remained unchanged.
"It's a mild positive that he's gone, he did an appalling job, and it's absolutely predictable that the share price would go up but it doesn't change any of the fundamentals surrounding the group. These are two very different businesses with very different problems," an analyst said.
Nick Bubb, retail analyst with SG Securities, added that it would be difficult to attract a calibre candidate to replace Mr Edelman. "It wasn't an easy job five years ago and it's not an easy job now. Middle-market, middle-position brands are being squeezed from both ends.
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