Blackfriar: Challenges facing the new man at the helm of Findel

Roger Siddle will oversee the company's restructuring once it eventually decides which parts of the business to focus on and what to get rid of.

The group said we will hear the outcome of the review "in the coming months", but it said that back in July and there was no news yesterday on when it will appear.

Siddle has spent the past four months as an outside consultant advising the Burley-in-Wharfedale-based company on what it should do. According to chairman David Sugden he has "acquired an intimate knowledge and understanding of the group's businesses" during that time.

He has a good pedigree. He was chief executive of BPP Holdings, one of Europe's largest professional training and education companies and he's a former managing partner of the UK business of Bain & Company, the leading global business consulting firm.

So what is Siddle likely to do?

The likeliest option is to focus on the core home shopping business. The group is in the process of getting rid of a number of internet businesses that were bought for large sums of money but have since become a millstone.

Last month the group sold two online businesses, I Want One of Those and Confetti. It has also closed mail order brands Cotswold and Letterbox.

In June, it sold its struggling entertainment retailing business Webb to Leeds-based turnaround specialist Endless for 1. Endless pledged to invest 15m in Webb, which had been starved of trade credit.

Now these distractions are out of the way, Siddle can focus on the core home shopping brands and start investing in both sports brand Kitbag and kitchen to laundry brand Kleeneze.

Sales at home shopping brand Kitbag, which operates official online stores for Manchester United, Chelsea, Real Madrid, Barcelona and Everton, remain strong.

Siddle is also likely to decide to keep the troubled education supplies division, despite it reporting an operating loss of 9m in the year to April 2.

This followed the discovery of accounting errors by the former management. While no money was actually stolen, the former management had overstated the performance of the business.

While school budgets are likely to be slashed under the Government's spending review next month, Findel has a market leading position and the management believes it will be well placed if the Government reduces the supplier base, as expected.

There is of course the issue of the 76m annual pre-tax loss, which was announced in July.

On the bright side, this was largely due to 52.8m in charges to cover impairment of intangible assets and 16.7m following cost reductions. There was also a 12.2m charge following changes to credit facilities after the breach of covenants.

A better guide to trading is Findel's full-year adjusted pre-tax profit, which halved from a restated 29.2m to 13.8m.

Analysts have cut their 2011 pre-tax profit forecast from 23m to 20m, but it's still a profit in a market that most retailers are struggling with.

One of Siddle's biggest challenges will be how to reduce the group's high debt levels which stood at almost 310m in June. Analysts will be watching the review closely to find out how he intends to do this.

There is one interesting thing to note. Siddle previously worked with Findel chairman David Sugden overseeing the 330m sale of BPP Holdings to Apollo Global last year at a 70 per cent premium to the pre-bid price.

Could part of the plan be to restore the company to health ahead of a sale?