‘ Peace in our time’ as M&S chief and George agree to bury hatchet
MARKS & Spencer chief executive Stuart Rose has ended hostilities with George Davies, but how long the harmony will last is anyone’s guess.
Rose, who yesterday unveiled a 20pc jump in firsthalf profits, describes their bust-up as ‘like having a row with your girlfriend’.
It could prove an expensive row. Davies is paid around £1m a year to run Marks’ per una brand, but is likely to be angling for even more cash.
Davies, who resigned last month after a row with Rose, will be full- time until next July before becoming parttime chairman of per una.
Rose says: ‘Peace has broken out. I would rather have George with me in a trench than outside.’
He says Davies has agreed not to start any rival clothing ventures.
However, most associates expect he will get itchy feet before long.
It is a coup for Rose to have persuaded Davies to stay, enabling him to build up a network of per una designers.
Strong sales of per una have boosted Marks, which has been hit by discount retailers such as Primark. First- half profits climbed 20pc to £308m before exceptional items, with total earnings up 75pc.
Marks is prepared to pay out £60m in staff and execuimproved tive bonuses this year, of which Rose could get £1.3m.
The interim dividend was increased from 4.6p to 4.8p as a sign of optimism.
The profit growth has come from cost- cutting, supplier terms and reduced mark- downs. Rose reckons there will be 40pc less stock in the Christmas sale.
But the real test will be whether sales are resilient over the festive period.
Rose hinted that they might go backwards, because last year Marks offered lots of discounts to lure shoppers. He warns that the consumer climate remains ‘very difficult’.
Rose is promoting his longstanding friend and colleague Steve Sharp to the main board as director of marketing and store design on a basic salary of £475,000. He will oversee a major refurbishment of 50 stores with the new format after a decade of ‘ woeful underinvestment’.
Childrenswear boss Fiona Holmes was asked to leave this week after 21 years with Marks as Rose restructures the clothing arm.