Change at top of high street chain
Bolland to leave M&S as womenswear suffers Xmas slump
Marks & Spencer chief executive Marc Bolland is to step down in April and will be succeeded by Steve Rowe head of the general merchandise division.
Mr Bolland’s departure follows a further fall in womenswear sales reported today. This morning he denied saying he expected to be around for another two years.
Chairman Robert Swannell also denied Mr Bolland was forced out.
“Categorically he was not not pushed, 100%. This was a decision we reached together and I’m glad to say it’s been a great partnership,” he said.
Mr Bolland will receive his full salary, benefits and pension benefits by way of phased monthly payments up to the end of the notice period of 7 January 2017.
He will remain eligible for consideration for payment of an annual bonus for 2015/16, subject to performance. He will not be eligible to participate in the annual bonus or performance share plan awards for 2016/17.
Analysts were sceptical about the company’s explanation for Mr Bolland’s departure. John Ibbotson, director of the retail consultancy Retail Vision, said: “After such a dismal Christmas, Marc Bolland has jumped before he was pushed.
“All the excuses in the world about unseasonably warm weather can’t hide the fact that a 5.8% slide in like-for-like non-food sales is little short of dismal. M&S’s clothing operation is now a fallen colossus. Years of long-term decline have seen it lose both its identity and market share, and the decision to sacrifice quality in order to cut costs has proved toxic for the brand’s core middle-class customers – who have been deserting in droves.”
In a statement, the company said: “Marc Bolland has informed the board that, after six years in the role, he wishes to retire as CEO in 2016.
“Marc will be succeeded as CEO by Steve Rowe, executive director of general merchandise. Marc Bolland will remain CEO and on the board until the end of the current financial year on 2 April 2016 when he will hand over to Steve Rowe. Marc will then remain available to Steve and the board to assist in the transition until 30 June 2016.
“In reaching its conclusion to appoint Steve Rowe as the next CEO of Marks and Spencer Group plc, the nominations committee set a rigorous assessment, development and selection process, including external benchmarking. The board is grateful to Marc for his planning, enabling the nominations committee to work carefully and systematically on his succession.”
Mr Rowe has been with Marks & Spencer Group for more than 25 years and been a board Member since 2012. and will face a tough job tackling the sluggish growth of non-food sales.
His division includes womenswear and was down 5.8% on a like for like basis over the last quarter. The company echoed Next by blaming the warm weather for slower sales.
Total UK sales fell 0.3% and 2.5% on a like for like basis. M&S.com sales rose 20.9%.
Mr Rowe will receive a salary of £810,000 on his appointment as CEO. The overall variable incentive opportunity for the role will remain unchanged. All other terms of Steve Rowe’s existing service agreement, including pension allowance, will remain unchanged.
Noting another “excellent” performance in food, up 17% in the Christmas week and 3.7% over the quarter (0.4% like for like), Mr Bolland said: “In general merchandise, we faced challenging trading conditions and fell short on availability.
“Unseasonal weather impacted sales across the clothing sector and resulted in unprecedented levels of promotional activity in the market, starting from Black Friday and intensifying through December.
“Against this backdrop we held back from the heavy discounting seen across the market especially in the run up to Christmas. While this had an adverse impact on sales we protected gross margin, which we now expect to come in at the top end of the guided range.
“However, we acknowledge there is more to do to address the disappointing GM sales, and the new team are focused on the three key priorities of availability, ranging and design.”
Mr Swannell said “Over the last six years Marc Bolland has led Marks & Spencer through a period of necessary change. Over this time, the company has made significant investment in enhanced infrastructure and capabilities.
“It is now positioned for a digital age, with its own on-line platform and dedicated e-commerce distribution centre, improved design and sourcing capabilities in General Merchandise and an industry-leading track record of growth and innovation in the Food business.
“Marc has put Plan A at the heart of the business and leaves a strong sustainability legacy. The board is very grateful to Marc for his leadership in this important period of enhancing Marks & Spencer’s competitive position for its future.
“I am delighted that, after the most rigorous succession planning, Marc will be succeeded by Steve Rowe. Steve has a deep knowledge of Marks & Spencer and a proven track record of delivering results in key parts of the business.
“The Nomination Committee was unanimous in supporting Steve’s appointment in the light of his considerable knowledge of the business and its people, his appetite to continue the process of change, particularly in General Merchandise, his perceptive and effective problem solving, his values and his observed leadership.”
Mr Bolland said: “It has been a huge honour to lead one of Britain’s most iconic companies. I am delighted to handover to Steve Rowe as my successor. I have worked closely with Steve for six years and I am convinced that he will be a great leader for Marks & Spencer.
“I would like to thank all my colleagues and the Board at Marks & Spencer for being so supportive of the drive to prepare M&S for the future. I am proud to leave such a large group of talent behind in the business.”
Mr Rowe said, “It is a great privilege to be appointed CEO of Marks & Spencer and to have the opportunity to lead this unique company and all its people forward.”