Frock horror
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Your support makes all the difference.The collapse in Laura Ashley's share price after last week's profits warning has wiped out all chief executive Ann Iverson's paper gains on her share options package.
On Thursday morning, the future of Ms Iverson's package looked as bright as her all-American trademark of self-confidence. Shares in Laura Ashley were trading at 144p against the 109p exercise price of some of the options granted to lure her to sort out the once-fashionable retailer.
By the evening, Ms Iverson's share package looked as dowdy as a rail of prim frocks, though the chief executive's confidence was undiminished. Laura Ashley's share price fell 28 per cent, at one point reaching 98.5p, the lowest it had been since August 1995, two months after Ms Iverson's arrival. On Friday, the shares closed at 106p. Five months ago, they stood at 208p.
Ms Iverson was forced to reveal that though profits in the year just ended rose to pounds 16.2m, current year profits will be hit by writedowns on unsold clothes and delays in opening new stores. Analysts cut their forecasts for the current year from well over pounds 20m to around pounds 17m.
Ms Iverson has additional share options. Some are exerciseable if the share price hits 150p, some if it hits 200p, by the end of this year. They could also be triggered if the, company hits profit targets ranging up to pounds 35m.
Despite the blow, Ms Iverson looks set to collect about pounds 140,000 in bonus for the year just ended. That's in addition to her pounds 350,000 basic salary, pounds 85,000 in pension allowances and a pounds 50,000 housing allowance.
Two years after being recruited to revive the company, Ms Iverson claims to have the problems under control. "My confidence, my understanding of the issues and the fact that the recovery plan is still intact are valid reasons for continuing optimism," she said.
But Clive Vaughan, retail consultant at Verdict Research, said: "There is something worrying there and the reason isn't clear." Paul Whyman, fund manager at Matheson Investment Management, said: "It looks as though she may have overextended. It's not a stock I would want to get involved in."
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