Marks & Spencer chief quits

Marks & Spencer is expected to make some essential changes after CEO Marc Bolland announced his resignation following another challenging Christmas.

While food was up by a record 3.7 per cent, the retailer’s general merchandise sales declined 5 per cent, with same store sales down 5.8 per cent, causing total group sales to be flat on last year. Though the retailer protected gross margin by avoiding heavy discounting in the run-up to Christmas, its sales performance is far from the turnaround that it has been targeting.

The food division celebrated its best ever Christmas as consumers traded up on quality for the festive season. Over the period, M&S launched 400 unique seasonal lines, helping to attract attention with its innovative offer.

By contrast, clothing sales were less “magic and sparkle” and more tragic debacle, with a failure to compete against the tide of Black Friday promotional activity and poor stock availability.

While Marks & Spencer, like its rivals, fell victim to the winter that never came, resulting in latent interest in its outerwear ranges, poor planning meant it failed to meet demand on more popular products. The company has reported that teams are now focused on availability, ranging and design, but this has been the message many times before.

Online told a stronger story, however its growth of 20.9 per cent is less remarkable when considered in the context of the 5.9 per cent decline experienced by M&S.com sales last Christmas. Yet its distribution centre in Castle Donnington showed a concerted effort to improve performance, with dispatching volumes up and good customer service driving satisfaction.

Internationally, a challenging economic environment continues to spell trouble for its Middle East franchise business, but a promising performance in India has helped to boost international sales by 2.9 per cent at constant currency, however at actual currency this translates to minus 2 per cent.

Executive director of general merchandise, Steve Rowe, will now take the helm as CEO. An M&S lifer with 25 years’ service to the company, he certainly has his work cut out. Yet with a unanimous nomination, he starts his new role with the full backing of the board.

  • Anusha Couttigane is a senior consultant at retail analyst Conlumino.

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