Day the High Street titans fought back
After years of losing shoppers to low-cost rivals, big names report a bumper Christmas
THE turnaround plans of two bosses handed the toughest jobs in retail were given a boost after they scored bumper Christmas sales.
Steve Rowe, chief executive of Marks & Spencer, and Dave Lewis, his counterpart at Tesco, both won back shoppers in their core markets following years of decline.
It is a crucial vindication for the men who were handed jobs that many considered a poisoned chalice: restoring the sales and reputations of two of Britain’s favourite brands.
For 49-year-old Rowe the sales boost in the M&S clothing department – led by shoppers snapping up the Mrs Claus red dress – will be a desperately needed vote of confidence after he shut dozens of shops.
Yesterday M&S improved market share in clothing and home for the first time in seven years. Sales rose 2.3pc, while food sales were up 0.6pc.
It came on a day when most of the big names in retail reported their Christmas figures. More established High Street brands such as Mothercare and Debenhams saw shares rise, while the upstarts of recent years such as AO World, Asos and Primarkowner AB Foods all sank.
Rowe stepped into the role at M&S in April last year after a 5.8pc crash in general merchandise sales the previous Christmas sparked Marc Bolland’s exit.
Last July M&S posted its worst results for a decade, and since then it has been embroiled in a dispute with staff over wages as Rowe tried to get to grips with costs.
The father-of-three needed to encourage the retailer’s traditional shoppers – who he dubbed ‘Mrs M&S’ – to return to stores.
Since taking the top role he has shunned Black Friday discounts, cut head office jobs and ditched poor- selling clothing lines. He rolled back discounted goods and clearance sales to avoid selling clothes at a loss and is overhauling M&S stores by closing 30, converting 45 into food-only shops and shutting some overseas outlets.
While the drastic measures earned him some criticism he has had success in several areas. In lingerie, M&S now has a 34pc market share in bras.
Rowe will no doubt be relieved, but John Ibbotson of Retail Vision, said: ‘It cannot yet be called a victory. 2017 will tell us whether it’s a flash in the pan or the beginning of a genuine fightback.’
Meanwhile, Tesco boss ‘Drastic’ Dave Lewis, 51, who was parachuted in from Unilever in 2014 to overhaul the grocer, has endured a slow start to his tenure after taking over following the store’s accounting fraud scandal.
The father- of-two earned the nickname for his cost-cutting. Lewis has shut dozens of poorly-performing stores, and this week announced 1,000 jobs would go with the closure of two warehouses.
But yesterday he proudly unveiled Tesco’s first quarterly market share gain since 2011. Sales grew 1.5pc in the 13 weeks to November 26, falling back to 0.3pc in the six weeks ending January 17.
The retailer was trumpeted as a Christmas success story, but investors were worried about a slowdown in spending in the weeks running up to Christmas. Shares fell 1.3pc, or 2.75p to 206.05p.