Marks & Spencer chief Marc Bolland was dealt a huge blow today as his trusted ally and highly rated finance director Alan Stewart quit the retailer and defected to rival Tesco.
The poaching is a huge coup for Tesco, and gives chief executive Philip Clarke the extra retail experience on the board that shareholders have been calling for as the company continues to lose customers to rivals Aldi and Lidl.
But the news leaves Bolland under extreme pressure to steady M&S, and is embarrassing as it comes just weeks after he handed Stewart responsibility for the company’s property portfolio.
It is the second disappointment this week for M&S. Bolland revealed on Tuesday that non-food sales fell for the 12th quarter in a row while web sales slid 8.1 per cent. Shareholders called for Bolland’s head at a hostile AGM, although he was re-elected with 96 per cent of the vote.
Stewart, pictured, is expected to join Tesco in the next few months, although no date has been set. He will receive a £1.7 million golden hello in compensation for lost share options, and is set to see his basic pay jump 30% to £750,000 compared with his M&S salary. However, it is 15 per cent down on predecessor Laurie McIlwee.
Stewart, who was previously finance director of WH Smith, must convince the City that Tesco can grow without cutting its margins too far in the midst of a price war.
McIlwee, who stepped down earlier this year, came under pressure for committing to a 5.2 per cent margin rate for Tesco, which later proved unsustainable.
At the annual meeting last month, chairman Sir Richard Broadbent said he was “looking at” seeking board members with retail experience.
Stewart joined M&S four years ago, shortly after Bolland’s arrival. He has overseen three years of falling profits but many of the problems, including poor stores and clothes ranges, have been laid at Bolland’s door.
Clive Black, retail analyst at Shore Capital, said: “Alan’s appointment at Tesco comes as a big surprise. He is well-regarded in the City. As such, it is a welcome boost to Tesco and will be seen as a disappointment for M&S.
“What the move most certainly shows is that Alan likes a challenge.”