Green quits as Amber Day misses profit forecast

PHILIP GREEN yesterday stood down as chairman of the Amber Day discount retailing chain as it admitted failing to meet its profits forecast of three months ago.

The resignation was partly due to pressure from two of the group's institutional shareholders - John Govett and Midland Montagu Asset Management - which were angry about the missed forecast.

In June, as the finance director and non-executive director resigned, the group said profits would be ahead of last year's, but that brokers' forecasts, then for about pounds 14.5m, were too optimistic.

Yesterday, it announced profits before tax in the year to 1 August had fallen from pounds 10.1m to pounds 7.5m.

Geoffrey Hall, of Midland Montagu Asset Management, which has 15 per cent of the shares, said: 'With regret, we supported Philip Green's resignation from the board as chairman and chief executive on the grounds that the missed profit forecast was unacceptable.' John Govett, with 10 per cent, is believed to have felt the forecast was the final straw.

Mr Green has been the subject of considerable adverse publicity in recent months, focusing on his management style, commercial deals and business relationships.

These pushed the group's shares down from a peak of 109p earlier this year to a low of 23p. Yesterday they closed up 1p at 35p.

'It had been my hope that it would be possible for commentators to concentrate on what I believe to be a fine company with a brilliant trading strategy and first-class prospects,' Mr Green said yesterday.

'Sadly, I now believe the distraction to the management of the business caused by this publicity, much of which relates to me personally and to my family, is such that it is right for the good of the company, shareholders and staff for me to stand down.'

David Thompson, who was appointed finance director in July, will temporarily take over the reins but the group intends to appoint an independent, non-executive chairman and a chief executive. It is already preparing a shortlist for the chairman's job.

Mr Thompson blamed the profits shortfall on a four-week delay in getting autumn and winter stock into the stores, and disappointing trading at the end of the summer, which forced it to discount stock.

He estimates the delay in rolling out autumn stock, which was not in the stores until August, cost pounds 2m, while the stock mark-downs cost a further pounds 1m. The delays were partly because Mr Green was preoccupied with calls from the press, analysts and advisers about the stream of speculation.

Since the year-end, sales volumes have recovered and are up on a like-for-like basis. Including new openings, the sales increase is into double figures.

The disposal of the menswear division produced a pounds 6m extraordinary loss, with a further pounds 8m of written-back goodwill. That meant there was a retained loss of pounds 13m.

Earnings per share fell from 6.81p to 3.87p but the final dividend was increased from 1.8p to 2p giving a total of 3.1p (2.7p).

(Photograph omitted)