01 January 2000

GREAT UNIVERSAL STORES laid the blame for a mediocre set of interim results (and ensuing profits warning) squarely on the shoulders of its ailing home shopping division. Pre-tax profits for the half-year fell 10.5% to £186.6m triggering a 20% slide in GUS’ share price to 340.5p - the lowest for nearly seven years. According to chief executive designate John Peace, the home shopping division ‘actually spoiled some good results’, with divisional profits plummeting 70% to £14.5m. The slide was attributed to fashion and clothing resolutely refusing to move off the pages of GUS’s catalogues. As one City analyst put it: ‘The num-ber everyone was surprised at was the speed [with which] the agency mail order business had declined and the limited future it clearly has.’

Argos, acquired last year in a £1.9bn hostile takeover, slipped 3% in like-for-like sales although GUS chairman Lord Wolfson claimed that October and November sales had improved. The group’s saving grace was Experian [the information services operation acquired for £1bn in 1996] which recorded an 18% rise in profits to £95.4m.

Mr Peace introduced a note of desperation into the proceedings by revealing that GUS is to discount its catalogue prices by 10%, a move likened by one anonymous analyst to ‘Custer’s last stand’. The EC2 bookies accordingly downgraded their full year profits forecast to £430m, and to £410m for 2001. Lord Wolfson, who has presided over the fallen giant’s misfortunes [after inheriting the GUS chair from his late father], moved into a non-executive role this month and is to retire later in the year.