Rose axes top jobs as M&S woes continue
The crisis at Marks & Spencer claimed a string of top management jobs today as the embattled retailer revealed trading had become even more difficult.
New boss Stuart Rose will reduce the number of board directors from six to three and remove a tier of management in a bid to speed up decision-making.
Mr Rose, who was parachuted into the chief executive’s position following a takeover bid by Bhs owner Philip Green in May, said trading conditions continued to toughen following recent signs of a wobble in consumer confidence.
The group did not provide sales figures since mid-October but results for the previous six months highlighted the problems of the ailing retail giant as profits slipped to £292.7m (€420.5m) from £325.1m (€467m) a year earlier.
Despite the downbeat mood, Mr Rose said his recovery strategy, including a pledge to overhaul brands and its supply chain, remained on track with shoppers likely to notice product improvements next spring.
He added: “Marks & Spencer is a business which requires radical change in the way that it operates.
“It needs to completely refocus on the customer. It needs to move more swiftly and with greater confidence. It needs to rebuild its pride in its service and standards.”
The overhaul of management will see Mr Rose, the former boss of Miss Selfridge-to-Top Shop chain Arcadia, take direct responsibility for retailing, merchandising and buying.
Finance director Alison Reed, who has been with the company for 20 years, will leave while Maurice Helfgott, who is executive director for menswear, childrenswear and home, will depart along with retail director Mark McKeon.
The company’s human resources director is among other departures as M&S creates a three-member board with an eight-strong trading team below them.
Mr Rose said the reshuffle reflected the need to make decisions faster, rather than on the abilities of those involved.
Today’s half-year figures show UK retail sales fell by 0.4% to £3.31bn (€4.8bn) during the period, with the decline widening to 4% on a same-store basis. The number of people entering M&S stores was broadly similar to a year earlier.
Much of the sales decline was seen in womenswear, where M&S reported a poor summer season, while like-for-like sales in its food halls fell 2.1% because of intense competition and an over-complicated range of products.
At the bottom line, pre-tax profits slipped to £211.7m (€304m), from £339.6m (€487.7m), as M&S booked £81m (€116.3m) of exceptional charges, including the £39.6m (€56.9m) cost of defending the bid approach from Mr Green.
The Bhs and Arcadia owner tabled a £9.1bn (€13.1bn) offer for the group in May but was foiled when the company’s board refused to engage in talks.
M&S shares were 1% lower today as some analysts again scaled back forecasts for profits covering the year to the end of March.
Expectations had been as high as £855m (€1.2bn) in January but Investec Securities analyst Matthew McEachran has now pencilled in £685m (€983.6m), down from previous guidance of £714m (€1m).
He added: “Next year the situation ought to improve but with no evidence yet of any of the operational or product improvements, confidence in next year’s numbers remains depressed.”
