Strong's future in doubt as Sears reveals pounds 120m loss

Sears, the retail group that includes Selfridges and the Freemans catalogue, reported the worst figures in its 31 years as a public company yesterday, fuelling speculation that the chief executive, Liam Strong, may be forced to stand down if the group's fortunes fail to improve.

Announcing a slump from profits of pounds 154m to losses of pounds 120m in the year to January due to poor trading and heavy restructuring charges, Sears' chairman, Sir Bob Reid, insisted that he and the rest of the board stood behind Mr Strong and that his departure was not an issue.

"We are behind Liam. This year looks like a bloodbath but it is a deck- clearing exercise. This will be a strong group and a real force in retailing," he said.

However, in spite of Sir Bob's support, investor patience is wearing thin as promises of a better future consistently fail to be backed up by results. Since Mr Strong was appointed as chief executive in 1992, Sears shares have underperformed the FT-All Share index by 35 per cent. They closed 1.5p higher at 98.5p yesterday.

One institutional shareholder said: "There can be no more errors and clearly things have taken a lot longer than anticipated. But we are not pushing for changes because I don't think it would be in our interest to replace Liam at this point. I don't believe the share price would respond."

Another shareholder who has been reducing his fund's stake said: "I'm not sure the Sears collection of businesses can be turned around by Liam Strong or anyone else. But he will get the blame and no doubt someone else will be trotted out as the next great hope."

Analysts expressed concern about the performance of the remaining businesses, which have seen like-for-like sales fall by 3 per cent in the 10 weeks since the end of January, with particularly poor performances from the Freemans catalogues, Dolcis shoes and Miss Selfridge.

Tony Shiret, stores analyst at BZW, said: "It's been a poor year and current trading is disappointing and weaker than most other figures we've seen from competitors. It undermines confidence in the chances of a recovery."

Sears' plunge into loss was caused by excepetional charges of almost pounds 200m relating to the sale of half a dozen poorly performing formats including Freeman Hardy Willis, Saxone and Olympus Sports.

Losses of pounds 54m were recorded on the sale of FHW ,Trueform, Manfield, Saxone and Curtess to the Sheffield entrepreneur Stephen Hinchliffe. However, leases on these stores could revert to Sears if Mr Hinchliffe's Facia group were to fail.

There were further losses of pounds 133m relating to the sale of Millets, Olympus Sports and the Dutch shoe division.

Sears, which still has more than 1,400 stores, is being re-focused on four businesses: shoes, mail order, clothing and Selfridges. However, profits collapsed at British Shoe last year, from pounds 38m to pounds 7.5m, with Dolcis struggling with too many fashion ranges. Trading profits were down by 8 per cent at Freemans after the company struggled to recruit new agents for its catalogues. Profits in the womenswear division fell by 4.2 per cent, with Miss Selfridge suffering from buying too many high- fashion ranges which proved unpopular.

The Selfridges department store proved a bright spot once more, increasing trading profits by 22 per cent to pounds 34.6m. The company is considering opening branches in Birmingham, Scotland and the North-east as well as the already announced Manchester branch, which will open in 1998. The Adams childrenswear division also did well.

The group loss of pounds 120m was struck on total turnover up 9 per cent at pounds 2.3bn. Trading profits before exceptional charts were pounds 106m. The dividend was left unchanged at 2.9p.

Comment, page 19

Suggested Topics
Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Guru Careers: .NET Developer / Web Developer

£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence