Is it time to give Marc Bolland the boot? That appears to be the view of Standard Life.
To be fair, the institutional investor didn’t quite come out and say that. No: what its head of equities, David Cumming, did is point out in an interview with the Today programme that profits have fallen despite £2.5bn of capital expenditure over five years.
Does Mr Cumming have a point? Since Mr Bolland took over in May 2010 the shares are actually up. Had you bought in then you’d be sitting on a return of more than 30 per cent, and that doesn’t include dividends.
Moreover the food business continues to defy gravity. Well, just about. Unfortunately for Mr Bolland, that is not how M&S is judged. And as its Christmas sales calamity demonstrated, general merchandise, including the all important womenswear, is still going backwards.
The real problem for Mr Bolland is not so much the capex, nor the distribution problems still plaguing the business despite all that investment. It’s not even the retailer’s unhappy Christmas.
The real problem is that Mr Bolland has failed to work out what M&S is really there for on the modern high street and information super-highway.
In that he’s not alone. You might very well argue that a succession of chief executives have run and failed with the same issue. We’ve had Mylene Klass and her white bikini. We’ve had Twiggy (again), Antonio Banderas, Dannii Minogue, and the rest. We’ve had George David and Per Una and lots of frilly stuff. But while the shares are up over Mr Bolland’s tenure, at today’s prices they’re still only trading at about the same price as they were trading at 20 years ago.
M&S has demonstrated a rare talent for making people a lot of money. Just not its shareholders.
If they’re honest with themselves, they might wonder whether anyone really has an answer for that question I posed: what is M&S for today?
Even though Mr Bolland has other black marks Mr Cumming talked about, what may save him for the moment is the difficulty in finding someone else who has a realistic answer to it. If that person actually exists.Reuse content