Strong set for pay-off

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Liam Strong, under pressure to quit as Sears chief executive, is entitled under his contract to a pay-off of around pounds 700,000. That amount, if paid, would be certain to upset institutional shareholders who have seen Sears' share price fall 42 per cent in the last five years.

On Tuesday Strong will reveal another fall in trading profits at the Selfridges to footwear retailer amid rumours that John Osborn, the ex- Sears executive who has revitalised the Alexon group, has been approached to take over.

Analysts forecast that profits for the year to 31 January, before exceptional charges, will be 20 per cent lower than last year at around pounds 80m. Heavy exceptional charges are likely to push Sears into a bottom line loss once again.

"Strong's departure is a matter of when, not if," said one leading shareholder.

When he was appointed five years ago Strong said his reorganisation plan would return the company to profit in three years. Despite selling 23 businesses Strong has still not found a winning formula, even as UK retail sales improve and competitors report better earnings.

Strong must convince critics he has a credible plan to stem losses at Sears' high-street shoe outlets. It is possible that he may also announce plans to demerge Selfridges, one of the few jewels left in a battered crown.

"If someone would come along and take the shoe business off its hands, what's left would look OK," said Clive Vaughan, consultant at Verdict Research Ltd, a London-based retail consultancy.

Shareholders hope Sears has finally reached agreement to sell the Freemans mail-order business to Littlewoods. The on-off-on-again negotiations have not improved Strong's credibility.

Strong is on a two-year contract rather than the one year recommended in the Greenbury report into corporate governance in 1995. In the last financial year he received basic pay of pounds 345,000 plus pounds 52,000 bonus.

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