Green out to rescue discounter: Amber Day founder talks to Poundstretcher

PHILIP GREEN, the colourful discount retailer and former chairman of Amber Day, has put in a surprise proposal to rescue the stricken Poundstretcher chain of shops.

He has approached Brown & Jackson, the group that owns Poundstretcher, with a view to putting together a financial package for the struggling group.

Mr Green, who was dramatically ousted from Amber Day in 1992 with a pounds 1.13m pay-off, disclosed his interest in Brown & Jackson at the same time as he is holding talks with a big shareholder in Owen & Robinson, the jewellery and footwear group.

Either company could become a vehicle for Mr Green to return to the stock market, where he is loved by some and viewed with suspicion by others.

Last week, Brown & Jackson warned that it was threatened with collapse after it failed to secure working capital from its bankers for the next 12 months. Two years ago, Bryan Duffy was ousted as the head of the group after a similar crisis and was replaced by Ian Gray, who last week had to admit that the group would be unable to trade unless it could attract additional finance from bankers or new equity investment.

Mr Green has been running a private group of discount shops called Xception since being forced out of Amber Day, since renamed WEW Group. He approached Brown & Jackson's advisers, County Bank, last week after hearing of its latest financial problems.

'I have a business in the same sector and I am interested in doing something,' said Mr Green this weekend. 'But I don't wish to go into something that is hostile.'

He added: 'If the institutions think that I have got an ability in this area, then I am prepared to put my money in. I have a knowledge of suppliers and the UK property market, and I have evident support from suppliers. This company needs a trader.'

Mr Green believes that Brown & Jackson could benefit from his retailing experience. He says that he would be interested to inject his business and some cash into Brown & Jackson.

His business has assets of up to pounds 5m, and he also has access to considerable cash sums. He raised pounds 8m when he sold his shares in Amber Day.

One option might be to take the company private and, as part of a financial restructuring, leave the current investors with equity in an unquoted stock. The company could then be re-floated in a few years.

Brown & Jackson's shareholders include Henderson Administration, Mercury Asset Management, Fidelity and Standard Life. In the past two years, shareholders have been asked for pounds 37m, yet last week the company unveiled losses of pounds 12.7m compared with pounds 6.63m the year before. Its banks, led by Midland, have objected to lending more to a loss-making business, especially since its assets have been shrinking after property disposals.

So far County have treated Mr Green's approach coolly. They have indicated that - at this stage - they think that other solutions, which may not entail a change of management, may be preferable. They have approached Pepkor, the South African group that owns the Your More chain in Scotland.

John Richards, a leading retail analyst at County Securities, said that Mr Green was one of the few people who understood what discount retailing was all about. But he added that there was an 'element of mistrust' surrounding him in the City, following the sharp collapse in Amber Day's share price shortly in the months before he left.

Mr Green confirmed that he has held talks with one of the big shareholders in Owen & Robinson, but he declined to make further comment.

It is believed that Mr Green has been offered a 30 per cent shareholding in the group, which could be a springboard for him to establish management control. Shares in Owen & Robinson closed the week 6p up on the speculation.

Brown & Jackson, the best performing share in 1992, has fallen over last week, from 61 2 p to 31 4 p.

(Photograph omitted)