City & Business: Laura Ashley follows the same old pattern

JIM MAXMIN, who was ousted last week as chief executive of Laura Ashley, once told me proudly how he had a special 'Bullshit' rubber stamp. This he fearlessly applied to deserving documents. It always seemed an ironic prospect. The documents most crying out for treatment were Mr Maxmin's own mission statements, management slogans, marketing guff and other jargon.

The Bullshit stamp could also be applied to virtually every optimistic prediction to come out of the retail group since its flotation in 1985. Time and again Laura Ashley has announced that the worst was over, only to stumble upon another skeleton in the wardrobe.

The pattern has become as distinctive as the group's much-loved floral frocks and furnishings. Last year it was a monumental cock-up in US computer systems. This year the UK stores started running out of stock on day three of the January sale. Last week came another poor set of results, another upset in the boardroom and another cautiously confident forecast for future trading.

The pathetic fact remains that shareholders, who paid 135p a share when the group came to the stock market in a massively hyped flotation nine years ago, have been repeatedly disappointed. The shares ended last week at 791 2 p.

It's been an everyday tale of success, hubris and nemesis. In 1953 the eponymous founder started making table mats and head scarves from her kitchen table on a Heath Robinson silk screen. Everything went swimmingly for the first two decades.

Disaster struck from the moment of going public, when Mrs Ashley died after falling downstairs. Ill-judged expansion overstretched the rather naive management, who had to oversee a higgledy-piggledy collection of factories as well as shop openings across the globe. Borrowings got out of control and losses rocketed. The Japanese retailer Aeon came to the rescue, injecting pounds 30m in 1990, and the group has limped along ever since.

Corporate governance has been unorthodox, to say the least: not much evidence of Cadbury, but an awful lot of flake. In 1990/1 the group went without a chief executive for a breathtaking 13 months. Then, after Mr Maxmin was brought in, the chairman, Sir Bernard Ashley, Laura's widower and still a 32 per cent shareholder, went 11 months without attending a single board meeting.

Mr Maxmin, who was ousted on Tuesday because of an irreconcilable dispute with the rest of the board over the pace of investment, was none the less thought suitable to head a presentation to the City two days later. Bizarre.

The man now in charge as executive chairman is Hugh Blakeway Webb. A barrister and former partner with the accounting firm Deloitte Haskins & Sells, Mr Blakeway Webb has advised the Ashley family on their tax affairs since 1982 and has been closely associated with the company's management ever since, joining the board in 1990.

You might think this would be a very good reason for not putting him in sole charge now. But this is what has happened. Mr Blakeway Webb, who has never run even the smallest of whelk stalls, now heads a business with turnover of pounds 300m spread across 26 countries. And there are no immediate plans to appoint a new chief executive. It could only happen at Laura Ashley.