Two directors go in Gateway cuts

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The Independent Online
TWO senior directors of Gateway, the supermarkets group owned by Isosceles, were sacked yesterday, as David Simons, the new chief executive, took the axe to the group's divisional structure in an attempt to cut costs.

The immediate casualties were Jim Grant, managing director of the Somerfield chain, and Paul Highett-Smith, the buying director who was recruited from Safeway in 1990.

The system of separate management teams for Somerfield and Gateway is to be scrapped. More job losses are expected once the consultants Coopers & Lybrand complete their analysis of Gateway.

Food Giant, the discount supermarkets arm, will continue to be managed separately. An Isosceles spokesman said there was no intention to sell off any large chunks of stores, despite the pressure on Isosceles to raise cash.

Isosceles, which owes its bankers about pounds 1.4bn, has frozen all principal and interest payments until May, pending a third restructuring. The banks are reluctantly negotiating a debt-for-equity swap.

The sackings follow the departure of Bob Nellist, finance director, and Brian Taker, personnel director. Mr Simons has also decided to axe the in-house training centre and has made some redundancies in the systems division.

Earlier this week Isosceles finally sold its US chain, Herman's Sporting Goods, for dollars 38m - a fraction of the price it hoped to get. It was sold debt-free, meaning that Isosceles had to take its borrowings on to its own balance sheet.