The Investment Column: House of Fraser
Thursday 30 September 1999
No wonder the City is nervous about HoF's plans for the pounds 172m proceeds of its sale and leaseback property deal with British Land. HoF says it is reviewing its options. It has been linked with a takeover of Allders, its rival; HoF has not denied being interested. It will be interesting to see whether the Takeover Panel continues to allow it to get away with its vague statements so far on the subject.
Whether HoF's management would have the necessary credibility to push ahead with a deal is also open to question. Allders could, in any case, become more expensive as a result of its current property revaluation. And with trading so difficult this is not the time for management to saddle itself with an expensive distraction.
The priority must be to improve the existing store portfolio. John Coleman, chief executive, is targeting pounds 70m for store refurbishment - though whether DH Evans is really worth saving is a moot point.
He is also continuing to invest in fashion lines where sales have been strong and where margins have been improving for the third year running. Market share is also on the up.
Home furnishings is more of a worry, though Mr Coleman says a 5 per cent decline is in line with the sector and does not indicate any loss of market share.
The shares, down 0.5p at 80.5p, stand at less than half the 180p issue price five years ago, having underperformed the market by 75 per cent in that period. On Morgan Stanley's full- year profit forecast of pounds 20m, the stock trades on a forward rating of 13. This has never been one to chase and now is not the time to start.
That's some guestlist! Stunning images show huge dynastic wedding between Ultra-Orthodox Jewish families which attracted 25,000 guests
Anonymity order lifted for triple child killer David McGreavy jailed in 1973
World news in pictures
Far-right French historian, 78-year-old Dominique Venner, commits suicide in Notre Dame in protest against gay marriage
Video emerges of Pope Francis reportedly performing an exorcism in St Peter’s Square
- 1 Terror at Woolwich barracks: Attacker tried to behead and disembowel British soldier
- 2 Gay couple beaten in park urge MPs to moderate language on gay marriage
- 3 After woman sells virginity for $780,000, here are the results of our prostitution survey
- 4 China agrees to impose carbon targets by 2016
- 5 Far-right French historian, 78-year-old Dominique Venner, commits suicide in Notre Dame in protest against gay marriage
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Win anything from gadgets to five-star holidays on our competitions and offers page.