Marks & Spencer chief executive Marc Bolland will step down after failing to revive clothing sales in almost six years at the British retailing bellwether.
Bolland, 56, will retire on April 2 and be succeeded by Steve Rowe, a 27-year company veteran who heads its general-merchandise unit, Marks & Spencer said yesterday, as it reported a slump in holiday sales.
Bolland’s departure comes after he struggled to stem a near-continuous decline in clothing sales.
M&S fashions have failed to inspire shoppers, which prompted several management shuffles at the clothing unit, while Christmas sales were hit by a shortage of some products.
The lack of revenue growth has irked shareholders, with about 6% opposing Bolland’s re-election at last year’s AGM.
“Sustained evidence of sales delivery has proved to be so elusive and ultimately needs to change,” said Clive Black, an analyst at Shore Capital.
However, news that full-year profit margins for general merchandise will be at the top end of the company’s forecast range because less discounting helped boost its shares yesterday.
The stock has risen 21% during Bolland’s time in charge, while competitor Next has almost tripled.
Bolland led the company “through a period of necessary change”, chairman Robert Swannell said.
His tenure has been marked by a succession of management changes, with both Kate Bostock and John Dixon leaving after failing to boost clothing sales while in charge of the general-merchandise unit.
That role is currently filled by Rowe, who replaced Dixon last year. He will earn an annual salary of £810,000 (€1.1m) as CEO.
Rowe, 48, previously headed the food unit, which, in contrast to clothing, has consistently performed stronger than the wider UK grocery market. M&S’s food division was again a relative bright spot over Christmas, despite declining food prices.
Same-store sales rose 0.4%, compared with the median analyst estimate for a 0.5% increase.
During Bolland’s tenure, M&S introduced a new website, modernised its information systems, and revamped distribution, having fallen behind rivals as more shoppers shifted to online ordering.
Bolland denied investor pressure was behind his decision, saying he always expected to serve five to six years as CEO.
Still, the general-merchandise unit had a “disappointing” Christmas, M&S said.
Same-store sales in the division, which accounts for about 40% of revenue and mostly comprises apparel, fell 5.8% in the 13 weeks ended December 26.
Reduced discounting means the division’s gross profit margins will be at the top of its forecast range growing two to 2.5 percentage points.
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