M&S coup seen as damaging setback for Selfridges

Selfridges shares fell 6 per cent to 252.5p yesterday as the City reacted badly to the news that the department store group's chief executive, Vittorio Radice, is leaving to take a board position at Marks & Spencer as head of its home division.

Though Selfridges immediately promoted its finance director, Peter Williams, 48, to the chief executive role, analysts said the loss of Mr Radice was a serious blow.

John Baillie at SG Securities, said: "He's a finance director who has been at Selfridges for 10 years. He's not been the creative force behind it."

Another analyst said: "He is a perfectly good guy and it's always difficult knowing who's done what. But my impression is that it is Vittorio who has turned it round."

Some analysts believe Selfridges could become a takeover target as its stock market value of £387m is only fractionally higher than its freehold property assets of £383m.

Mr Baillie said: "A property company or a financial buyer might have a go at it. You could say Tom Hunter should be looking at this, not House of Fraser."

However, some analysts said Mr Williams might be better suited than Mr Radice for the roll-out of Selfridges' expansion programme under which the group is aiming to expand beyond its flagship store on London's Oxford Street and its two stores in Manchester.

Selfridges is due to open a fourth store in Birmingham next year and has found a site in Glasgow. It is looking to open additional branches in Leeds, Bristol and Newcastle as well as developing the property behind its London store.

Mr Williams joined Selfridges as finance director in 1991, after being a divisional manager at Freemans, the mail order group then owned by Sears.

Yesterday he said: "We've known for a while that Vittorio was going to leave at some point. I already run the store design projects and have been going on buying trips. As far as I'm concerned it's business as usual. We have a strong creative team here."

There was speculation in the City yesterday that Mr Radice might be a possible future chief executive of M&S. One analyst said: "You would have thought he would be a candidate at the highest level."

Another added that Mr Radice was likely to have a wider brief than just home furnishings: "He could help with other things, like store lay-out. But having people around like him, George Davies and Yasmin Yusuf [head of design], increases the retail skills of the group substantially."

Mr Radice revealed that talks with M&S started in earnest in September after Selfridges had opened a store in Manchester city centre on a site shared with M&S.

Selfridges said a new finance director would be appointed "in due course". M&S shares closed 1.75p lower at 326.75p.