M&S goes abroad for new boss

MARKS & SPENCER is on the verge of lifting the gloom of a disastrous Christmas trading period with the appointment of a new chairman. The struggling retailer is thought to be finalising the replacement of Brian Baldock with Luc Vandevelde, currently managing director of Promodes, a French retailer.

However, even the appointment of Mr Vandevelde, a Belgian, is unlikely to provide much relief for M&S's ailing share price, down more than 30 per cent this year. Next month's trading statement is expected to show a slump of as much as 20 per cent in Christmas trading. It is thought that while food sales have fared reasonably well, demand for M&S's clothing has declined yet further.

M&S suffered a fresh blow on Friday when Goldman Sachs, the US broker, reduced its forecast for this year's profits by 12 per cent to pounds 475m, and for next year is predicting a further fall to pounds 465m. Last year the retailer made pounds 546m.

The appointment of the new chairman will end the search for a figure with sufficient international stature to bolster the City's dwindling confidence in M&S.

The arrival of Mr Vandevelde, which follows the merger of Promodes with French rival Carrefour, would likely trigger a resumption of M&S's overseas expansion. Previously, he has criticised of British retailers for "missing the boat" of foreign growth. "If you're not international yet, it's going to be very tough to become international," he said recently. "Most UK retailers are stuck."

As managing director of Promodes, Mr Vandevelde was responsible for a combination of retail outlets from convenience stores to hypermarkets. Observers think that his first task will be to remove Peter Salsbury, the M&S chief executive who has failed to impress the City since he assumed the post in January.

Confirmation of the appointment could come as early as tomorrow, when M&S will reveal details of a management reshuffle which will see the roles of 45 senior employees change. The rejig is being billed as an attempt to make M&S more customer-focused.

The appointment of a new chairman is a vital part of M&S's attempts to preserve its independence. Philip Green, the entrepreneur who earlier this year bought and subsequently broke up Sears, last week admitted he was considering an approach. However, Mr Green is now on holiday and is not expected to resume his interest until the new year.

Kohlberg Kravis Roberts, the US venture capitalist, is also thought to be considering an offer. M&S shares have recovered 20 per cent in the last month in anticipation of a bid.

ST MICHAEL'S SUITOR, PAGE 3

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