Marks and Spencer (MKS) has a habit of wearing out its chief executives. The reason is not hard to see. The challenges of adapting an ingrained culture and good-in-parts strategies to constantly changing business environments must be immense.
Stuart Rose adopted the mantra to “protect the magic and modernise the rest” when he took on the role in May 2004. After fending off a takeover attempt, he restored profitability by focusing the business away from frumpy middle-aged clothes towards younger styles. This brought some success, and in 2007 he introduced a policy called Plan A (because there can be no Plan B), which aims to minimise the group’s contribution to climate change. The objective is for M&S to be net zero by 2040 through initiatives such as cutting waste and using sustainable supply chains. Some scoffed, but it soon proved how environmental altruism could generate profits. In March 2008, Rose took on chairing the group as well as being chief executive. After two years of tensions over governance, pay, strategy and succession, he said that he’d be going “a bit earlier” than planned, adding “I’ve done this job longer than the Second World War lasted.”
The controversy persisted when Marc Bolland was headhunted from Morrisons. His “golden hello” in May 2010 was potentially worth £15mn, only half of which was to buy out the bonuses and shares he’d had to sacrifice for jumping ship. He brought in a three-year strategy to revamp stores, abandoned plans to sell white goods such as televisions and scaled back stocks of branded goods. He followed through on Rose’s strategy of chasing younger customers by scrapping the clothing line for over-50s but, squeezed between cheap fast fashion at one end of the market and affordable luxury at the other, clothing sales remorselessly declined for three years and the group lost market share to rivals such as Next (NXT). Against this, food sales took market share and heavy investment in both the supply chain and the website improved online sales. By 2015, after five years in the role, he’d had enough. “I’ve done the heavy lifting that was needed,” he said, adding that he had “built the foundations” for the future.
Yet seven years later, there was still “a lot of heavy lifting to be done” according to Archie Norman, who has chaired the group since 2017. This was in 2022 after Steve Rowe, an M&S lifer who had lasted six years as chief executive, had decided that it was the “right time to pass on the baton”. Rowe had reshuffled and slimmed down the management team, closed almost a tenth of M&S’s stores and axed in-house fashion brands. After steering the group through the pandemic, he’d had to announce a dividend cut and a rights issue. His tenure brought in an online food partnership with Ocado, but he departed saying that he’d left his successors much to do. They’d need to make supply chains more efficient, improve stores and close more, he said, as well as upgrade technology and reduce the floor space devoted to clothing because more sales are carried out online.
On his watch, M&S came up with a plan to demolish its flagship 1929 art deco Oxford Street store and construct a mediocre steel and glass block on the site near Marble Arch. Critics said that demolition would release 40,000 tonnes of embedded carbon. They challenged the M&S party line that a new-build would be more sustainable and said that retro-fitting made much more sense. Although permission was granted by Westminster Council, housing secretary Michael Gove intervened to preserve the building. Norman tweeted that the decision was “eccentric”.
By now his protégé, Stuart Machin, had become the chief executive. He called the decision “utterly pathetic” and claimed that “the whim of one man” was threatening M&S’s future in Oxford Street. Curiously, when he was appointed in May 2022, Katie Bickerstaffe was made co-chief executive – even though Machin is not a co-chief executive and Bickerstaffe reports to him. Both had been internal candidates. Norman said “we’re very keen to have continuity. M&S over the years has had far too much change and zig-zagging in direction,” yet he recently said that 70 per cent of M&S’s top 200 executives are new to the business. Machin is the day-to-day leader, responsible for food, operations, and store development. Bickerstaffe is in charge of clothing & home, international and financial services, and digital and data transformation. The group’s financial results recently impressed the market. Norman says that the three of them are “flying in formation”.
Their stance about the frustrated demolition sits uneasily with the many achievements of Plan A. There’s a real opportunity here – to revamp the flagship store and promote the environmental benefits of the group’s products. Not only does Plan A demonstrate continuity, enhancing it could yet give M&S a real competitive edge.
