Struggling Jessops loses finance director

Jessops, the camera chain, has parted company with Ian Harris, its finance director, and appointed advisers to explore the potential sale of the business. Mr Harris became finance director in November 2006 and leaves at the end of September 2007 with a £185,000 pay-off, the equivalent of 12 months salary.

Mr Harris’ departure sent shares plummeting 10% as investors worried about the financial well-being of the company. Jessops finances are shaky after growing too fast, only to be knocked by competition from the internet.

Jessops say Ian Harris left because the job was not the one he accepted, however, the market is concerned that his departure is a sign of a dismal set of interims in late September. Jessops added that Harris was ready to join an expanding retailer but ended up being involved in the financial restructuring of the company.

The company issued 3 profit warnings earlier this year and revealed a £25 million pretax loss for the 6 months to April. Furthermore, Jessops is to close 81 stores and cutting 550 jobs. It will be left with 234 profitable shops and will boost its internet offering in an attempt to improve sales.

The company was valued at £160 million when the private equity division of ABN Amro launched it onto the stock market in November 2004. However, it is now worth £11.3 million. A decision on the company’s future will be announced in 2008. Sources confirmed Deloitte is looking at a refinancing or a sale but the company declined to comment.

Jessops received £67 million of emergency funding from HSBC in June this year. Jessops is currently paying 11% interest and the loan runs out in 15 months. A spokesperson for Jessops rejected claims that the camera chain failed to achieve its targets it gave HSBC to secure the emergency funding.

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