David Prosser: M&S looks forward to a new leader
Thursday 07 January 2010
Outlook Will Sir Stuart Rose be satisfied with the performance of his beloved Marks & Spencer during his final full calendar year at the helm? Announcing M&S's first increase in sales for two years yesterday will have been satisfying – and Sir Stuart seems to have steered the retailer through the recession relatively unscathed – yet the interest in when Marc Bolland is due to finally join the retailer must have been irritating.
In truth, opinion has been divided on Sir Stuart from the moment he became M&S chief executive six years ago. Many in the City say he has performed brilliantly, masterminding M&S's escape from Sir Philip Green's takeover clutches before nursing the retailer back to health. In 2008, its profits topped £1bn for the first time in 11 years. There are those, however, who have always suspected that Sir Stuart got lucky – arriving at just the right time to capitalise on middle Britain's sentimental regard for M&S with some commonsense improvements.
The spats with shareholders that have characterised the past year or so suggest that investors are ready for a change, or at least a greater degree of power sharing at the top. And this latest update has given Sir Stuart sceptics more ammunition.
For while M&S has indeed managed to get those sales on an upwards trend once again, it is lagging many of its rivals. Next's figures, unveiled 24 hours previously, were better. And both are miles behind John Lewis.
Market share is slowly but surely being given up. The better quality of the clothing sold by the supermarket chains, as well as the success of operators such as Primark– plus, at the top end, John Lewis – has caused M&S problems. Food, too, is underachieving. The pitiful promotion last year that saw Sir Stuart's marketing team target Waitrose with predatory advertising, only to see its rival benefit from the campaign, underlines the extent to which M&S has been caught short.
Mr Bolland, who comes from Morrisons, ought to be able to stop the rot on that front at least. But he has plenty of other challenges to face. The difficult environment for consumer spending is not a problem for which Sir Stuart can be blamed, but there is a sense that while stores have been sharpened up and branding transformed, a strategic vision of the future is still missing.
We should give Sir Stuart his due. Notwithstanding yesterday's correction, M&S's share price has doubled in the past 12 months alone, and the company is now a modern retailer facing the future with far more confidence than once seemed possible. And yet, given this latest mediocre performance, Sir Stuart will understand, in his heart of hearts, why so much attention is now focused on his successors.
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