The City will be looking for Strong medicine from struggling Sears

STOCK MARKET WEEK

Liam Strong, the beleaguered chief executive of the sprawling Sears retailing empire, faces more inquisitions when he presents to a hostile stock market another lamentable set of interim results tomorrow.

The Selfridges department store to Freemans mail order business has already indicated more distress and after the Facia fiasco enthusiasm for the group is at a low ebb.

In the past six months Mr Strong has had to face angry institutional investors, calls for his sacking at the yearly shareholders' meeting and the confusion - and mounting costs - that surrounded the sale of some of Sears' shoe operations.

When he arrived four years ago the shares were 100p; they ended last week at 94.5p. Sears was the Cinderella of the retail scene long before Mr. Strong appeared. Although he has chopped and changed, the problems he inherited have so far proved insurmountable. Half-time profits are likely to be down 14 per cent to pounds 26m, but once a raft of provisions have taken their toll a modest pounds 1.5m is probably the best hope. There have not been any signals of a BTR-style dividend cut. An unchanged 1.05p a share is the guess although with profits almost disappearing the scrapping of the payment could be regarded as prudent.

Selfridges remains the star in the Sears firmament. Its profits will have increased, from pounds 11m to pounds 13m. There have been suggestions the still ramshackle empire should develop its department store arm by repeating the Selfridges experience in other cities. In the meantime it is contenting itself with expanding its famous store in London's Oxford Street.

Year's profits of pounds 110m (pounds 85m after provisions) are expected. At its peak the group managed pounds 153.8m.

For Mr Strong time is rapidly running out. He is, it could be said, in the last-chance store. The chief executive is said to have the unanimous support of his co-directors, headed by former British Rail chief, Sir Bob Reid, but there is seething discontent among shareholders, big and small. The market will be watching for evidence of improved operational controls and whether a significant sales increase - after all it should be a prime beneficiary of any feel-good factor seeping through - becomes evident in the second half-year.

As Sears struggles, a retail chain that teetered on the brink of disaster six years ago is likely to be accorded a joyous reception when it produces its interim results on Wednesday.

The slump experienced by shares of Next seemed to herald oblivion for the trendy group. At the time of the 1987 crash they were around 360p. Come the dawn of 1991 and the price was in single figures with the market convinced the business was about to go bust.

Next subsequently staged an astonishing revival; it is the ultimate recovery share, nudging 600p last week. Its comeback was masterminded by Lord Wolfson of Sunningdale, chairman, and David Jones, managing director. Lord Wolfson is chairman of Great Universal Stores, a dual role which has convinced many that GUS, once known as "Gorgeous Gussies" in the market, will merge with Next and Mr Jones will be chief executive of the enlarged group.

On Wednesday the latest episode in the retail masterpiece should be evident with interim profits up nearly 25 per cent to pounds 55m. John Richards and Sean Eddie at NatWest Securities look for pounds 155m for the year. But, no doubt thinking of Next's remarkable record, they say: "The hold which the Next brand has over consumers shows no signs of weakening and against an improving consumer background the only danger must the likelihood of further upgrades."

Retailers have a strong presence in another busy reporting week which starts with blue chips riding at record levels and Footsie expected to soon burst through the 4,000 barrier. With the autumn results season in full swing more than 100 companies have booked places on the week's results schedule.

Tesco, which prompted the present round of price-cutting and took some of the sparkle out of superstore shares, should manage a comfortable 10 per cent gain to pounds 320m when it discloses interim figures tomorrow.

Many believe the market over-reacted to the price cuts. Such events are a traditional part of superstore trading. There are, it would appear, few sign of any desperation responses from Tesco's deadly rivals and the cuts are no more than the usual autumn round of pre-Christmas price promotions.

Wm Morrison, one of the smaller supermarket chains still trading under its own banner, is feeling the pinch of competition from its bigger rivals. It is likely to check in with half-year profits little changed at pounds 51m. As Morrison feels the squeeze it becomes increasingly vulnerable to a takeover strike.

Laura Ashley, the home furnishing chain, is another retailer in recovery mode. Interim profits should have doubled to pounds 6m. The once-ailing chain has been reshaped by American Ann Iveson who has embarked on a programme of rolling out larger stores and closing smaller, unprofitable units.

Investors who backed the Redrow housebuilding group when it floated two years ago must be hoping spectacular figures today will drag their shares above the 135p issue price. They are likely to be disappointed. Year's profits are expected to show a 12 per cent fall to around pounds 26.5m. There has been some market unease that founder and controlling shareholder Steve Morgan has moved his home to the Channel Islands.

His relocation to Britain's favourite tax haven has, not surprisingly, raised questions about his commitment to what is essentially a fairly local type of business. According to NatWest Mr Morgan is still "actively involved in the group (and some would say more so than before) but the group needs to be conscious of the City's concerns".

Others reporting include Dalgety, the pet food group expected to be down at pounds 46m from pounds 93.7m over the year, and Laporte with interim figures of pounds 57m (pounds 67m).

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