View From City Road: Pentos still waits for the dawn

Even those as accustomed to bad news as shareholders in Pentos must have winced at yesterday's revelation that the troubled retailer's management is chalking up several million more pounds to experience.

It is barely six months since shareholders were asked to stump up pounds 45m in a rights issue for the troubled retailer. They had every reason to suppose that the pounds 56.5m of write-offs declared on that occasion would take care of all the nasties in the cupboard. Now they are told a further pounds 10.5m of exceptional charges will be needed to sweep up dead stock and the like.

Heads may have rolled since then - Coopers & Lybrand has been ditched in favour of Arthur Andersen as auditor - but confidence is scarcely bolstered by the fact that Bill McGrath, chief executive, has yet to find a finance director to replace Clive Gregory, who left in July. Instead, an Andersen partner has taken up temporary residence in the finance director's chair.

Finding buyers for the office furniture operation, the Athena poster chain, and Rymans, the stationery group, at anything like a reasonable price will be a painfully slow process.

If the strategy is to concentrate on Dillons, it is a debatable one. Dillons is finding it tough competing with giants such as WH Smith. No one yet knows what the demise of the net book agreement will mean for the retailers.

Mr McGrath says with hand on heart that this is the low point in the group's fortunes. It is always darkest before the dawn, he adds. Let's hope this is not just another false one.