Marks & Spencer ended months of speculation over its succession plans today when it named City banker Robert Swannell as its next chairman.
Mr Swannell, who was a lead adviser to M&S in its defence against retail tycoon Sir Philip Green's takeover bid in 2004, will succeed Sir Stuart Rose on January 4.
The former vice-chairman of US bank Citigroup's European operations will be paid £450,000 a year for the non-executive role. He will join the board on October 4 before assuming the role of chairman three months later.
The 59-year-old, who is also chairman of HMV Group, a position in which he will remain, said: "It is a privilege to be asked to chair one of the world's greatest brands."
Mr Swannell can expect to receive plenty of scrutiny from the company's army of private shareholders and the industry as a whole, analysts said.
Sir Stuart, who will continue as chairman until January 4, previously held the role of both chairman and chief executive - a position which is against best practice and was deeply unpopular with its major stakeholders.
The role was split earlier in the year as former Morrisons boss Marc Bolland was brought in as new chief executive. Bowing to pressure from shareholders, M&S agreed to cut Sir Stuart's pay by 25% from £1.16 million to £875,000, as he lost his executive role.
Samuel Johar, chairman of headhunters Buchanan Harvey, said Mr Swannell's considerable experience in the City - more than 33 years - could help mend relations with the larger stockholders.
He told the FT: "Given that M&S's relations with the City are a little frayed, Robert Swannell's intimate knowledge of the City and clubbable style would certainly improve relations."
But analysts said Mr Swannell will also face a battle for the hearts of M&S' small shareholders, many of whom were charmed by Sir Stuart.
Neil Saunders, consulting director at retail analyst Verdict Research, said: "Robert Swannell is not necessarily the first name that comes to mind for chairman of Marks & Spencer.
"However, his appointment makes strategic sense. He knows his way around M&S, retail and the City. Sure, he's not as big a personality as Sir Stuart, but he is just as competent and that's what counts.
"One challenge is his relationship with the thousands of small shareholders, they adored Sir Stuart so Mr Swannell will have a very tough act to follow."
He added: "In many ways, winning over these small shareholders is a more difficult task than managing the larger institutional shareholders in the City."
Sir Stuart, who insisted on Mr Swannell coming on board as an adviser to M&S when he joined in 2004, said he was "delighted" that Mr Swannell would be taking up the position.
He said: "His considerable experience of both the City and the commercial world will be a real asset to the board and the business."
M&S said it had no concerns over Mr Swannell remaining as chairman of HMV Group as the firms do not operate in competing spaces.
Mr Swannell is also non-executive director of property investor British Land. He will step down as non-executive director of infrastructure investor 3i.
In July, M&S often viewed as a bellwether for consumer sentiment, reported a 3.6% rise in first-quarter sales, but its outlook remained cautious.
Mr Bolland will deliver his strategic plan at the interim results in November.Reuse content