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New M&S boss faces steep challenges

M&S boss Marc Bolland exits the High Street juggernaut in April meaning replacement Steve Rowe will have some time to think about new strategies.
January 7, 2016

One of the biggest challenges in retail faces Steve Rowe who will assume the top job at High Street stalwart Marks and Spencer (MKS) after its chief executive Marc Bolland announced his departure today. Mr Bolland leaves in April after which Mr Rowe, who now heads the general merchandise division, will be on the hook for turning around the fortunes of M&S's clothing and homeware division. Sales there fell a disappointing 5.8 per cent, on a like-for-like basis, during the third quarter. Mr Bolland said his resignation was not related to the group’s poor performance over the Christmas period.

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While it seems M&S clothes aren’t popular with customers, the group has done well to try to keep up with the demand for online shopping. During the third quarter online sales rose 21 per cent, while its new loyalty scheme Sparks has recorded 3.3m new members since its launch 11 weeks ago. It seems current head of multichannel operations Laura Wade-Gery was not the ‘heir apparent’ to Mr Bolland the broadsheet media had dubbed her. It’s Peel Hunt analyst John Stevenson’s view that Ms Wade-Gery is “not a natural trader” like Mr Rowe, who has been credited for previously steering the group’s food division to its current levels of success. In the third quarter food sales grew 0.4 per cent on a like-for-like basis against the wider deflationary backdrop.

In fact, Mr Rowe has only been in charge of general merchandise for six months since taking over the reins from John Dixon, who quit last July. It’s Mr Stevenson's belief that any operational changes affecting general merchandise have yet to make a significant impact on quarterly numbers. That said, there’s plenty for Mr Rowe to tackle in his new role. Product quality and price are the key to growing M&S sales, and it’s a widely held view that the group can afford to sacrifice some of the recent margin gains to invest in the business.