Grossart brings Ashley north to help dry up the red ink

stages of a major boardroom shake-up.

The statement concentrated on the personalities involved. But behind

the names lies a bigger story, a battle to ensure a sound future for a

profitable Scottish-based company caught up in the costly corporate

mistakes of its London parent.

Out go Ashley chairman James White and two non-executives, Tony Orton

and Peter Maydon. In comes Hamish Grossart, taking the chair from White

next month, and John Langlands, currently director of finance and

planning at Scottish Enterprise, who becomes Ashley's new finance

director.

They join Robert McNeil, who becomes deputy chairman with immediate

effect, and Bill Macdonald, who has been running Ashley's main

subsidiary, the Eclipse window blinds business. He steps up from

operations director to managing director.

The board changes follow an announcement late last year that Ashley

was relocating its headquarters from London's Grosvenor Square to the

Eclipse headquarters at Inchinnan.

The departing chairman explained yesterday's board changes thus: ''It

is clear that the company will benefit from a more localised and

concentrated approach to the management of its affairs.'' That is not,

by any stretch of the imagination, the whole story.

Ashley Group is another of those sexy corporate inventions of the

1980s, with plush Mayfair offices and an acquisition policy driven more

by tax considerations than any internal logic, which nearly succumbed in

the harsher climate of the 1990s.

Gone is the mainstay food distribution business in Spain, sold at a

massive loss to Hong Kong interests. Some #50m of shareholders' funds

have been dissipated so far. If the buyers of the Spanish business

default on staged payments, as they have already started to do, the

costs to investors could rise even higher.

Three years ago, Ashley Ordinary shares stood above 100p. Now they are

down to 8[1/2]p. In the process, the Scottish-based window blinds

business acquired by Ashley in 1989 -- which has been profitable every

year since it was started, in 1970, by Robert McNeil and his brother

James -- risked being dragged down by its ailing parent.

Yesterday's changes put control of Ashley firmly in the hands of those

who understand the blinds business. The new board will have to clear up

the rest of the red ink spilt by the Spanish adventure. But they also

have the opportunity to build a significant new listed presence in

Scotland.

Until 1988 Ashley Industrial Trust was a shell company with one asset,

a plywood manufacturer based in southern England. In came a new

management team, Tony Butler and four other executives from food

retailers, Dee Corporation.

They raised new capital to acquire food businesses, grouped under the

Digsa name, in Spain. Turnover shot up from #3.3m in 1988 to #295m in

1990. But the growing profits raised an advance corporation tax problem.

The Ashley board looked around for a UK acquisition to meet that

problem. They alighted on the Apollo and Eclipse window blinds

businesses in Glasgow, started by the McNeil brothers in 1970.

The earn-out deal for the blinds businesses, announced in May 1989,

was one of the biggest purchases of a private company Scotland had ever

seen. The top-line purchase price was #54.8m. Hamish Grossart advised

the McNeils on the sale.

Robert McNeil joined the Ashley main board, which was dominated by

those who claimed to understand food retailing. On that front, things

were rapidly going awry. A new loss-making acquisition in Spain proved

harder to turn round than was thought. Losses in that side of Ashley's

business mounted.

Chief executive Tony Butler was ousted in February 1992. Two Spanish

directors left last May, when the Digsa business was finally sold to

Parafax, a Hong Kong-based group, for a deferred consideration of #20m

and the assumption of #33m of debt.

Two other ex-Dee men left the board in October. Now chairman White, a

former chairman of Bunzl, is going too. The two non-executives now

departing only joined the Ashley board in November 1992, after the

Spanish commitments had all been made.

The Digsa disposal resulted in a #47.2m exceptional loss and Parafax

has defaulted on the first #5m of the deferred payment due last

November. Legal action is pending but the whole #20m may have to be

written off.

With Grossart in the chair and Robert McNeil as his deputy, the new

Ashley board will be determined to sort out the group's finances and

allow the blinds business, which made an operating profit of #2.7m in

the latest six-month period, to realise its full potential.