Shake-up at M&S as marketing chief is removed

Marks & Spencer yesterday confirmed that Luc Vandevelde is to split the roles of chairman and chief executive as part of a bigger than expected boardroom reshuffle which sees the group's marketing director leave the company. The shake-up came as M&S reported solid trading figures showing its recovery is on track.

Mr Vandevelde, who has overseen the recovery of M&S in the past two years, will revert to his original role as chairman on 1 September and become part-time on 1 January 2003.

As expected, Roger Holmes, the managing director UK retail, will become chief executive in a move which will see his salary increase from £450,000 to £600,000. Mr Holmes, 42, joined the company only 18 months ago from Kingfisher but has been credited with a significant role in the recovery of M&S.

Mr Holmes will be one of the youngest chief executives of a FTSE 100 company. He said he hoped to bring "youth and energy to the role". Commenting on Mr Holmes's promotion, Mr Vandevelde said: "He has been one of the main architects of the recovery. His appointment is well deserved and gives us enormous confidence in the future of the business."

Mr Vandevelde, who famously pledged to achieve a turnaround of the formerly struggling retailer within two years when he joined in February 2000, will devote about 60 per cent of his time to M&S, with his salary adjusted accordingly. He said he hoped to remain as M&S chairman "for many years".

The changes were supported in the City. Nick Bubb, retail analyst at SG Securities, said: "I think the splitting of the roles is perfectly sensible and normal. He [Mr Holmes] has proved himself and the recovery is on track, so what's the big deal?"

Other changes include the departure of Alan McWalter as marketing director. He had overseen the controversial advertising campaign that saw a size 16 woman strip naked, run to the top of a hill and shout "I'm normal". The company has decided it no longer needs a marketing specialist on the board and Mr McWalter, a former Woolworths marketing chief, will leave with a one year pay-off of £300,000.

The heads of the food and clothing division of the group have been promoted to the board. David Norgrove, formerly head of strategy and international business, becomes head of clothing. Justin King, the former Asda executive, who joined M&S as head of its food business in March 2001, is also given a boardroom position.

The news came as M&S reported a 9.1 per cent increase in total sales for the 14 weeks to 6 July at its annual meeting. This included a 12.7 per cent like-for-like increase in general merchandise, which includes clothing footwear and home furnishings. The food division produced a disappointing result, with like-for-like sales up just 1.5 per cent.

Mr Vandevelde sounded a cautious note about the outlook. "We were trading this quarter against weak comparative sales last year in clothing and looking ahead our comparatives become progressively more challenging. In addition, while current conditions on the high street remain favourable , the environment is likely to become less buoyant as the year progresses."

Matthew MacEachran, a retail analyst at Investec Henderson Crosthwaite, reiterated his current year profit forecast of £720m. "M&S is a core holding once again, but let's see another quarter of progress," he said. The shares edged up 0.5p to 363.5p.