Marks & Spencer cheered investors by hiring Marc Bolland, the chief executive of Morrisons, to take over from Sir Stuart Rose, delivering the type of heavyweight appointment that the City had been clamouring for.
Sir Stuart Rose, who is also M&S's executive chairman, said that after looking at both internal and external candidates: "He [Mr Bolland] brings a wealth of marketing experience and has made a great success of his time at Morrisons. We have chosen the best candidate. It is a win-win situation."
He added: "We have had a number of emails from shareholders saying it is a good appointment." Shares in M&S soared by 21.7p to close at 390p – the highest riser on the FTSE 100.
However, the poaching of Mr Bolland – who has crafted a sustained and powerful recovery since becoming Morrisons' chief executive in September 2006 – is a blow for the Bradford-based grocer, whose shares tumbled by 14.6p to 280.9p. His appointment will also raise questions over the futures of the leading internal candidates: John Dixon, the executive director of food, Ian Dyson, the finance director, and Kate Bostock, the executive director of general merchandise. City analysts were underwhelmed by their performances at an investor day in October, dubbed a "Britain's Got Talent-style of competition" by its chairman.
But Sir Stuart said: "If you ask my senior management team as to whether Marc is a good catch, they would say: 'he was'." He also touted Mr Bolland's international experience with Heineken.
Sir Stuart said that after Mr Bolland joins he will stay on for a period of time as "part-time" chairman to help him get "saddled up" and ensure a "smooth transition". He will leave as chairman before the end of July 2011. Sir Stuart said Mr Bolland will have "total control over the business".
M&S declined to comment on Mr Bolland's remuneration and said he will take up his position in the new year, but did not provide a date.
Morrisons said that he will remain chief executive until the end of its financial year which lasts until 31 January.
Mr Bolland said: "M&S is one of the world's great brands and I am very pleased to be given the opportunity to lead the company forward at this exciting stage."
Tony Shiret, an analyst at Credit Suisse, said: "There is no doubt he is a good signing." Other heavyweight candidates linked with the job included the chief executives of Sainsbury's and Asda, Justin King and Andy Bond.
Asked repeatedly in September if he was ruling himself out of the M&S job, Mr Bolland eventually said he was, although he had several times been noncommittal and stuck to the mantra "I love Morrisons, I am happy here."
While Mr Bolland will bring a wealth of ideas to M&S' food division – which accounts for half of its sales and has struggled for much of the past two years – he has never had any involvement with clothing. Mr Shiret said this criticism could have been directed at nearly all candidates.
But he said: "The food business is very structurally challenged. It is not like turning a handle. They have been selling the same type of stuff for a long time and everyone else has been moving into their market in a much bigger way."
Bank of America Merrill Lynch analysts said they expected Morrisons to cast the net internally and externally for a replacement chief executive. Analyst John Kershaw said: "The upskilled internal talent pool may provide the replacement CEO. However, we expect the net to be cast wider, with Tesco and Asda – helped by its Leeds head office near Morrisons in Bradford – the most likely source of a potential recruit."
Marc Bolland: The flying Dutchman gets M&S job
After taking the helm at the grocer Morrisons in September 2006, it is perhaps fitting that Marc Bolland has made many in the retail sector eat their words. When he was unveiled as the Bradford-based grocer's chief executive, the reaction of many was "Marc who?", given that he had spent nearly 30 years at Heineken, where his last role was chief operating officer.
In the UK, few gave him much hope, particularly as his first year and a half was spent in the office next to Sir Ken Morrison, the legendary chairman who grew the eponymous chain into the UK's fourth biggest supermarket from a single market stall business.
Skip forward three years, and the charismatic Dutchman, 50, has spearheaded a phenomenal and consistent turnaround in sales at the grocer after the travails of its merger with Safeway completed in 2004.
For the year to 1 February 2009, Morrisons grew underlying pre-tax profits by 13 per cent to £636m, on sales up by 12 per cent to £14.5bn.
Mr Bolland this by sharpening up its marketing and focusing on its "historic strengths of value and fresh food quality". However, Mr Bolland's strategy at Morrisons has been "evolution not revolution", and he has repeatedly resisted calls to move the grocer online and expand more aggressively into non-food.
At Morrisons, he regularly ate fish and chips in the staff canteen on a Friday, and became a fan of Leeds United since arriving in the UK. Mr Bolland, who enjoys clay pigeon shooting, has also rebuilt an old Aston Martin recently.