Directors ousted as M&S axes top jobs

Click to follow
The Independent Online
MARKS & SPENCER has reacted to its stumbling performance on the high street with a drastic management clear-out at its Baker Street head office in London and the threat of more to come.

Britain's biggest retailer is ousting three members of its board and 28 of its 125 most senior managers to help to streamline decision-making and make the group less bureaucratic. Retail experts say the move could be the prelude to up to 1,000 redundancies at the group's headquarters, which employs 4,000 people. The cuts are the first redundancies at the traditionally paternalistic employer since 1991 when 700 jobs went.

Yesterday's casualties include John Sacher, the last remaining member of the founding Marks & Spencer families on the executive board. Mr Sacher, 57, is the great grandson of Michael Marks, one of the partners who founded M&S in 1884. He has been at the company since 1968 and was in charge of information technology systems.

His departure means the only boardroom link with the founding families is Lord Sieff, a non-executive director and the son of a previous chairman.

Also going is Chris Littmoden, the head of M&S operations in America, fuelling speculation about a sell-off of the Brooks Brothers division - the classic menswear chain for which it paid more than pounds 400m in 1988.

The changes are the first major moves by the new chief executive, Peter Salsbury, since he issued a profits warning last month. He is under pressure to restore the group's fortunes, which have been hit by falling sales, rising costs associated with a rapid expansion and merchandising mistakes that have left the shops full of unwanted goods.

The City welcomed yesterday's changes and the shares rose 19.75p to 401.75p. However, some experts criticised the company for failing to bring in new blood. "It looks to me as though they are just shuffling the pack internally, which can't do any harm but I think something more radical may be required," one fund manager said.

Many analysts have been pushing for the group to appoint a new chairman from outside the business to replace Sir Richard Greenbury, the current non-executive chairman. It was problems over finding his successor that led to a huge boardroom bust-up at the group last year resulting in the departure of its deputy chairman, Keith Oates. "They need some new faces," one analyst said.

Mr Salsbury is working on a strategic review of the group's operations, which span the UK, continental Europe, the US and the Far East.

The three departing directors - the other is Derek Hayes, who was in charge of M&S's continental European operations - will leave at the end of May. The total cost of the re-structuring is expected to be about pounds 10m.

M&S hit problems last year when it warned of a "bloodbath" on Britain's high streets. The company blamed weak consumer confidence and talk of recession. But analysts said the merchandise had become dowdy and prices were seen as too high as the company was still buying most of its clothing in Britain while rivals shipped in goods from lower-cost producers in the Far East.

Comments