I'm not sure whether Sir Stuart Rose was right to blame the global financial crisis for about 80 per cent of Marks & Spencer's downturn in sales, and the rest on his own mistakes, when announcing third-quarter results last week. Don't get me wrong. I'm not suggesting Sir Stuart is being either disingenuous or economical with the truth because it's one of those things you can never prove right or wrong anyway.
But looking at the figures, particularly the disappointing food sales, it seems as though Sir Stuart should be taking a higher share of the market for blame. It's been obvious for months that M&S's food and ready-made meals are too pricey, competing, as they now have to, with far-cheaper Tesco produce. Gone are the days when you could cheat at dinner parties by serving M&S dishes or get away with failing to cook a meal for the family by saying: "This is not just food. This is M&S food." Even Sir Stuart could see what was happening and it cost food guru Steve Esom his job last spring after sales dropped 4.5 per cent. The new team has had more than six months to get the mix right but has clearly failed too. M&S has also been slow to get prices right at its under-performing Simply Food stores.
It's no easy task changing such an enormous food business as M&S's – one which, as Sir Stuart pointed out rather defensively, still sells far more than Waitrose. There's no doubt, too, that Sir Stuart has over-spent on store refurbishment and been too gung-ho at a time when he should have been trimming back. Nor was he helped last week by the contrast with rather-good results from Justin King at Sainsbury's and a host of other retailers including Next, New Look, Debenhams and even JD Sports. All of these companies, in their own ways, showed that if you get the product right, people are willing to keep spending.
And that's the rub. In clothing, M&S has to compete with brilliant discounters such as Primark (good figures expected next week) at the lower end; Next, Debenhams and even Bhs in the middle; and chains such as Zara and Top Shop at the high end. Much of M&S's reputation as Middle England's shopping temple rests on trust, so it can't compete too much at the low end in case the clothes fall apart. And at the fashion end, M&S's clothes look dull compared to sassy Zara, which continues to churn out stunning designs at extraordinarily reasonable prices.
No wonder Sir Stuart's New Year resolution was to have more fun – he must be exhausted. Being chief executive and chairman can't be easy in this climate, particularly if he has to cut the dividend, as indicated by the share price. M&S is still a brilliant company and will no doubt bounce back as it has many times before; it's like a cat with nine lives. Finding a new chief executive quickly will help. Mr King – who used to head up food – could be the man to help out if the two could get over their differences.
More generally, investors need to watch out for company bosses using the recession as a cover for bad commercial decisions. They must be more vigilant than ever in scrutinising what chief executives are really saying about their businesses.
The Tories need a big-hitter to take on Mandelson. Clarke is their man
If the pundits are right, then it won't be long before jazz-loving Ken Clarke is back in the swing on the business beat. About time too. The former Chancellor has been wasted on the backbenches during this crisis, on which he has so much to say. He's been a fierce critic of Gordon Brown's attempt to get us to spend our way out of recession, arguing that building up more government debt can only be bad in for the economy and future generations. He has also been spot-on about how the crisis can only be solved by getting lending going again to households and business.Clarke knows much more radical action is needed.
Fortunately David Cameron appears to have come to his senses and realised that he needs to give Clarke a bigger platform. He won't be brave enough to replace George Osborne, the shadow Chancellor, but he does want the old big-hitter higher up the table. Word is that Clarke could replace Alan Duncan as shadow Secretary for Business, Enterprise and Regulatory Reform, to take on Lord Mandelson, who needs more aggressive opposition. Alternatively, he could be given a new economics-cum-Treasury role.
Clarke has a lot of time for Mandelson, surprisingly enough, but that wouldn't stop him from taking on his Lordship.
Appointed Chancellor after Black Wednesday, Clarke is credited with pulling the UK out of the ERM crisis and returning the country to sound public finances. That seems a long time ago but the memory is still sharp with Clarke.
His critics will say he's too off-piste to bring back – a euro-loving, tobacco-smoking bruiser whose days are over. They are wrong about the euro. In a recent interview, Clarke told me that while he still supports the UK adopting the euro, he knows it is off the agenda – thanks to Brown.
Let's hope Cameron doesn't waste too much time before making his reshuffle. Having Clarke back will be amusing as well as productive.
Slippery slopes: Could Britain find salvation in skiing?
With the snow falling thick and fast on the pistes, skiers are preparing for one of the best seasons in years. In the past few days, 20cm of the white stuff has settled in the French Alps, and the sector reckons occupancy will only be slightly affected by the crunch. French ski bosses say bookings are in line with last year, though they expect fewer UK visitors due to sterling's slide against the euro.
General de Gaulle knew what he was doing when he built France's Alpine resorts after the war to improve the health of the nation. Perhaps Gordon Brown should follow that example by investing in the Scottish resorts as part of the public-sector jobs boost to be announced tomorrow. As a way of improving this nation's health, it sure beats quantitative easing.Reuse content