06-01-98: Spice goes out of EMI shares as Geri splits -- by Jeff Daeschner
LONDON (Reuters) - "Ginger Spice" Geri Halliwell's decision to quit the Spice Girls, one of music giant EMI Group Plc's top acts, sent the British company's stock lower Monday. EMI's stock fell seven pence, or 1.9 percent, to 511 pence, after going as low as 502. The overall market was weak. Despite the fall, analysts said the move by Halliwell -- who confirmed Sunday that she had quit one of Britain's biggest pop phenomenons since the Beatles -- would have only muted impact on EMI. EMI's stock has fallen sharply in recent weeks as the marriage of rivals Seagram Co. Ltd. and PolyGram NV dashed investors' hopes of a bid for EMI. "The stock has come off today because people realize that the Spice Girls contributed a significant portion of profits last year," said Morgan Stanley analyst Sarah Simon. "But there's no reason why they shouldn't be able to find another Spice Girls. It's been phenomenally successful, but it's been done before, and it will be done again," she added. Last week, EMI reported a 19 percent drop in its 1997-98 pretax profits to 307 million pounds ($500 million) before one-time items. EMI did not disclose the Spice Girls' contribution to profits, and the company's Virgin Records label had no immediate comment on the financial impact of Ginger Spice's departure. "There shouldn't be much of an impact on EMI's outlook because the Spice Girls weren't expected to produce an album this year. And the old ones are still selling pretty well," one media analyst said. The Spice Girls have sold an estimated 30 million albums around the world, and their movie "Spice World" was a box-office hit. Ginger Spice's departure triggered speculation about possible legal action against the group by promoters of their U.S. tour, which is due to start June 15 in Miami with its four remaining members -- Scary Spice (Melanie Brown), Sporty Spice (Melanie Chisholm), Baby Spice (Emma Bunton) and Posh Spice (Victoria Adams). However, EMI analysts played down that possibility. "I would have guessed it wouldn't be EMI being sued -- it would be the band themselves," one said.