Outlook: The crew of the St Michael sail into icy waters

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MARKS & SPENCER has not hit the iceberg yet but there was the distinct sound of deckchairs being rearranged after yesterday's management reshuffle at Baker Street. This is Peter Salsbury's third shake-up in the executive ranks since he moved into the hot seat a year ago. In some respects it is the most obvious and perhaps the one that M&S should have carried out first.

Henceforth M&S will structure its UK operations so that it can respond better to customer demand. What's more, it has made sure that the directors who are now in charge of the group's seven new retail businesses are the right people for the job.

This sounds less like a high-flown management strategy and more like plain old common sense. Nevertheless it still took a squad of recruitment consultants armed with their psychometric testing equipment to highlight these simple tenets of retail life to the top brass at Baker Street.

Some of the results of the new approach to managing M&S are illuminating. Mr Salsbury discovered, for instance, that the chap who was running finance was actually happier in women's lingerie. Others are predictable, such as the appointment of the former Boots executive to look after beauty products.

The most sensible change in roles has been to take the man who looked after food, one of the few areas where M&S can claim a genuine success, and put him in charge of womenswear, its biggest single division and the root of its present malaise.

M&S has also abandoned the policy of placing orders two seasons in advance on the basis that if its buyers couldn't work out in summer what would sell in autumn then what chance did they have of getting the spring collection right?

But all this may be too little, too late. Mr Salsbury's efforts to stem the reversal in the group's fortunes, through job cuts, special promotions and management streamlining, have so far failed to change the direction of the ship. If the City's worst fears are realised and sales do decline by a double-digit figure over the Christmas period then a profit warning alongside January's trading update looks inevitable.

As bad luck would have it for Mr Salsbury, that is likely to coincide with the appointment of a new chairman who may have his own robust views about how to turn the ailing retailer around.

Lurking in the background are those ever-present bid rumours. Yet M&S, for all its difficulties, remains a powerful brand which has only recently fallen on hard times. Furthermore, the list of bidders may be shorter than people think. Philip Green, the only one to have poked his head above the parapet so far, patently does not have the skills to take on M&S. He is a break-up specialist when what the group needs is rebuilding.

Still, a profit warning accompanied by a renewed fall in the share price may tempt the brave. In these markets, anything remains possible, even a tilt at St Michael's halo.