Oates set to quit at M&S `in days'

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The Independent Online
THE DEPARTURE of Keith Oates from Marks & Spencer is thought to be days away as the company considers a compromise solution to its management succession crisis.

Mr Oates, M&S's deputy chairman, has angered chairman Sir Richard Greenbury by making a direct appeal to the non-executive directors for either the chairman or chief executive position. Insiders say they are surprised he has not already left, but believe his position has become untenable. "If Sir Richard gets his way, he will not have Oates anywhere near him," one said.

M&S insiders are expecting an announcement on the succession plans in the next few days. They now envisage a "phased" succession as Sir Richard gradually hands over the chairman and chief executive positions ahead of his retirement in 2001.

The M&S non-executives, who have cleared their diaries for almost daily meetings on the issue, are now thought to be considering a transition that would mirror the way Sir Richard took over from his predecessor, Lord Rayner. In 1988 Sir Richard was appointed to the new position of chief executive officer below Lord Rayner as chairman. Sir Richard then moved to the combined roles of chairman and chief executive three years later.

Insiders say Peter Salsbury may be appointed to the new post of chief operating officer, with a view to moving up to become chief executive at a later date. Sir Richard would remain chairman with an outsider appointed as non-executive deputy chairman.

Sir Christopher Hogg, who knows Sir Richard well, has been mentioned as a candidate. But he would be reluctant to take on another high-profile job as he is already chairman of two FTSE 100 companies, Reuters and Allied Domecq.

A phased succession, with a high-profile appointment from outside the company, would appease the City, which is keen on an injection of new ideas at M&S. It might also satisfy some on the M&S board who are unhappy about the prospect of a ticket of Sir Richard as chairman and Mr Salsbury as chief executive. Critics of this combination say it would be "more of the same", as Mr Salsbury is very much Sir Richard's choice.

M&S's institutional investors are pushing for an early decision to end the damaging uncertainty. However, it is understood that while Sir Richard might make an announcement soon, he is keen to stick to his original timetable, with the changes starting to come into effect next May.

M&S has been rattled since announcing a 23 per cent fall in profits earlier this month. Its gloomy comments about a "bloodbath" in clothing retailing sparked fears of a poor Christmas in the high street.

But M&S observers say the company needs to improve its pricing and the quality of its ranges to fight back against rivals such as Next and Debenhams, which have grabbed market share. They say it is vital that the company gets the right management team to come up with fresh ideas.

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