Tie Rack stock glut prompts fourth warning

TIE RACK, the high street retailer, issued its fourth profits warning in little more than a year yesterday when it said pre-exceptional losses for its full financial year would be around pounds 7.5m. Brokers had been expecting losses of pounds 4m.

However, the shares rose 15 per cent to 22.5p after Tie Rack said Nigel McGinley was returning as chief executive with immediate effect. Mr McGinley stepped down from the top job in October 1997 and has since been serving as a non-executive director.

His return follows a boardroom clear out which has seen the two joint managing directors leave last year. "I've got my chief executive back and I'm very pleased," said Roy Bishko, Tie Rack's chairman who founded the business in 1981.

Tie Rack blamed the latest warning on poor second-half sales and difficult trading conditions in its major markets. After merchandising problems last year the stores were left with an excess of unwanted stock, which had to be offloaded at lower margins.

However, the group was upbeat about prospects saying it had cleared its overstocked position and had net cash of pounds 11m.

With Tie Rack's market value only standing at pounds 15m there have been rumours that Mr Bishko might seek to take the business private. "I have no such plans," he said. "We are just concentrating on running the business. We've got a good young team here and Nigel coming back means he will help bring it all together. I am very excited."

Mr Bishko said he would be "taking some of the clutter" out of Tie Rack's stores, which were crammed with too much stock. It is also adding more woven ties to complement its existing printed ranges.

Management has been strengthened in key areas including buying, merchandising and marketing and the benefits of these changes will begin to be seen in the coming financial year, Mr Bishko said.

Tie Rack has been closing underperfoming stores. It now has 431 outlets worldwide, with 154 in the UK.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
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: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Austen Lloyd: Law Costs HOD - Southampton

£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

SThree: Recruitment Resourcer

£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn