New boss 'means M&S will fight takeover'

The prospect of a drawn-out battle for ownership of Marks & Spencer grew today after the retailer came out fighting against Bhs owner Philip Green.

Analysts said the chain’s shock move to replace chief executive Roger Holmes with respected retailer Stuart Rose signalled it was in no mood to roll over.

The boardroom changes came four days after Mr Green announced he was working on a plan to buy the high street business – thought to be worth £10bn (€15bn).

With the chance of the bid price being driven up by a strong defence from M&S, shares in the company rose for a third successive session – up 2% to 366.75p (€5.50).

On Thursday, the stock was 290.5p (€4.40) after M&S disappointed with its annual results.

The immediate task for Mr Rose will be to revive the trading performance of M&S, although he is also expected to give a robust case for its independence.

Mr Rose, who worked at M&S for 17 years, knows Mr Green well after the entrepreneur acquired the Top Shop-to-Dorothy Perkins chain Arcadia in 2002. Until then Arcadia had been run by Mr Rose, who gained credit for concentrating on its main brands and selling off non-core chains.

Henk Potts of Barclays Stockbrokers said: “Stuart Rose is a heavyweight retailer and will have a clear strategy on how to turn the business around. Some shareholders may now think that their future prospects are best served by a new and reinvigorated management team.”

Mr Rose’s arrival was accompanied by the appointment of respected London City figure Paul Myners as interim chairman. He takes the place of Luc Vandevelde, who had already signalled his intention to leave the company.

Mr Rose, who started work at M&S today, said he wanted to restore the group’s reputation for “good quality, good value, good service and innovation”.

He told BBC Radio 4’s Today programme that while M&S had “not been on the high ground” for a few years, it was “a fundamentally very sound business”.

Describing Mr Green as “a great guy and a very good retailer”, he pointed out that no offer had yet been made.

He added: “When Philip comes with an offer, if he does, obviously the board will have to consult with the shareholders and decide what is the right thing for the business.

“But first and foremost, my priority is to get into the business and to harness the energy of the people there. I believe we can very quickly execute some things and bring the business back to the high ground.”

Details of the 55-year-old’s pay package have not yet been announced, but it is thought Mr Holmes, who joined M&S in 2000, will receive a pay-off of around £600,000 (€900,500).

Seymour Pierce retail analyst Richard Ratner described the appointment of Mr Rose as good news but said the change was also tough on Mr Holmes.

He added: “There is no doubt that he stabilised M&S, improving its in-store housekeeping, visual merchandising and staff morale.

“He also managed to improve profitability, despite an awful performance recently from clothing, and the latter is the reason that he has been the author of his own downfall.”

Mr Rose will be joined on the board by Charles Wilson, who has worked with him at Argos, Booker and Arcadia.

Mr Green is reportedly preparing to use £1bn (€1.5bn) of his personal fortune to fund his bid, with the rest coming from banks and existing M&S shareholders, who will be offered shares in a new company to be listed on the Alternative Investment Market.