Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point

In Depth

On Air

Archive
Feedback
Low Graphics
Help

Monday, August 30, 1999 Published at 15:13 GMT 16:13 UK


Business: The Company File

Storehouse 'in surplus crisis'

Sales have fallen at Bhs and other Storehouse shops

UK retailer Storehouse, which owns Bhs and Mothercare, is reported to have severe stock problems after making too large orders for its autumn/winter season.

The Times newspaper said Storehouse had ordered Mothercare's season's stock in February - before closing 20% of its stores.

The chain now faces having to sell the excess in a Christmas sale which will impact upon its spring/summer collection next year, the paper said.

It quoted a company spokesman who said clothes ordered for this season were intended for 360 stores, but only 290 stores were still open to sell them.

Sales slump

The spokesman said: "The orders were made before the decision to close the stores.

"We are now working with our suppliers to see how we can address the issue going forward."

Earlier this year, Storehouse chief executive Keith Edelman quit following a warning that the company faced a cut in profits.

Storehouse profits dropped from £125m to £98m in the year to March.

A slump in children's clothing sales at Mothercare hit the retail chain particularly hard.

Profits at Mothercare - once its most profitable section - were nearly halved from £31m to £18m.

Storehouse said it was looking to narrow the range of goods it sells through its stores, which is likely to involve cutting many of its suppliers.

Possible break-up bid

Speculation is mounting that the group will be forced to put itself up for sale before poor Christmas results further damage its share price.

A spokesman for the board of management said that break-up was among a range of options the company was considering, but that there were no immediate plans in the pipeline.

Debenhams has ruled itself out as a possible buyer, but Arcadia, who recently became the UK's second largest retailer by scooping up Sears womens' shops, may be interested.





Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©


The Company File Contents


Relevant Stories

28 May 99 | The Company File
Storehouse chief quits

20 May 99 | The Company File
Storehouse in trouble





Internet Links


Storehouse


The BBC is not responsible for the content of external internet sites.




In this section

Microsoft trial mediator welcomed

Vodafone takeover battle heats up

Christmas turkey strike vote

NatWest bid timetable frozen

France faces EU action over electricity

Pace enters US cable heartland

Mannesmann fights back

Storehouse splits up Mothercare and Bhs

The rapid rise of Vodafone

The hidden shopping bills

Europe's top net stock

Safeway faces cash demand probe

Mitchell intervenes to help shipyard

New factory creates 500 jobs

Drugs company announces 300 jobs

BT speeds internet access

ICL creates 1,000 UK jobs

National Power splits in two

NTT to slash workforce

Scoot links up with Vivendi

New freedom for Post Office

Insolvent firms to get breathing space

Airtours profits jump 12%

Freeserve shares surge

LVMH buys UK auction house

Rover - a car firm's troubles