For Steve Rowe, who will take the top job at M&S following the announcement that Marc Bolland is to leave in April, the machinations of Sir Philip’s “Revival” bid, which he lived through as director of homewares, need not be studied.
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Third-quarter sales of general merchandise were down by 5.8% for the thirteen weeks to 26 December.
M&S said it had enjoyed its best ever Christmas for food sales, which jumped 17 per cent in the key Christmas week.
He will remain as chief executive and on the board until 2 April, and will remain “available” to Rowe during the handover until 30 June.
Bolland said he had informed Chairman Robert Swannell last summer he wanted to retire in 2016 if a suitable candidate as successor could be found.
But retail expert Clive Black, at Shore Capital, said the Christmas performance by M&S’s general merchandise business was “demonstrably disappointing” and weaker even than rival Next, which shocked the market earlier this week with a fall in festive store sales and sharp slowdown in its Directory catalogue and online arm.
Marks & Spencer recently closed down its Dutch food outlets at a number of BP petrol stations because of poor sales. Sales collapsed 5% in the Christmas quarter, or 5.8% if you don’t include sales from new shops opened in the year.
The City was cheered by the news that a drive for higher margins is likely to come in at the top end of expectations, amid cost-cutting in the supply chain and more stock being sold at full price.
Mr Rowe snr had appointed O’Kane Poultry in Ballymena as a supplier to M&S – a relationship which continues with O’Kane owner Moy Park. However, overall group sales were flat following a “disappointing” result in general merchandising.
Marc Bolland arrived at Marks & Spencer, from Morrisons, six years ago clutching a lucrative contract and with high expectations of a revival of the company’s fortunes.
During most of the time in which Mr Bolland has been chief executive, wages have lagged inflation, eating into consumer spending sharply.
M&S did, however, nudge up its margin guidance for the division, reflecting a decision to hold back on discounting products.
“I have worked closely with Steve for six years and I am convinced that he will be a great leader for M&S”, Bolland said. The Guardian report that Bolland believes he has made a significant contribution to the “heavy lifting” of modernising the company, by improving distribution, enhancing IT infrastructure, breathing life into the food offering, overseeing a strengthening in online services for customers and raising the quality of clothing on sale.
“The board is very grateful to Marc for his leadership in this important period of enhancing M&S’s competitive position for its future”.
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As well as his strong track record, Mr Swannell suggested that it was Mr Rowe’s near-encyclopaedic knowledge of M&S that had sealed his appointment, praising his “deep” insight into the retailer and his “considerable knowledge of the business and its people”.
