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 19Reuse content