Back to the future at M&S
LORD Wolfson has been chief executive of Next since 2001, and few could put a name to current chairman John Barton who is stepping down at the age of 72 having been at the helm since 2006.
Yet despite a recent slowdown, Next widely is regarded as Britain’s best run high street and online retailer.
Contrast this with Marks & Spencer where doors revolve so speedily that few management teams have stayed the course.
The choice of Archie Norman as the new chairman of M&S, to oversee the changes engineered by chief executive Steve Rowe, has been hailed as a second coming and the shares shot up 4pc.
After being chaired by the investment banker Robert Swannell, investors seem relieved that a ‘retailer’ is taking the helm.
Before anyone goes overboard, we should remember that several previous, and failed, incumbents at the top of M&S had a retail background, including removed former chairman Luc Vandervelde and his chief executive Roger Holmes. Not only that, Holmes, who came to M&S, was a protege of Norman at the conglomerate Kingfisher before it became just B&Q.
Indeed, Norman and Holmes were so close that the wannabe M&S chief executive – who at one stage thought it might be a good idea to shut- down the flagship oxford Street store – informally sought Norman’s advice when he took the job. For those who have forgotten, Vandervelde and Holmes were forced from office in 2004 after they drove the share price down so far that then plain Philip Green felt it was worth making an offer. So there is not much new under the sun.
The problem with most M&S appointments in recent times is that they have come from backgrounds far removed from women’s clothing and fashion which are at the core of M&S. Norman may be a brilliant grocer and DIY expert, but he is not Amancio ortega, the genius behind Zara.
As if there were not enough non-rag trade people in charge at M&S, earlier this week it poached Jill McDonald from Halfords to take charge of clothing, health and beauty. Aside from her extensive knowledge of unsightly lycra and burgers (from her McDonald’s fastfood background), it is not absolutely clear what she brings to the coat hangers.
M&S holds a special place in the hearts of British households. Many people cannot resist popping in even if they don’t buy anything. But in spite of heavy investment in new warehouses and online, much still doesn’t work. A recent attempt to buy an assembled garden table was as difficult as navigating the Bay of Biscay. It was easier to reach for the lifeboat.
Everyone (except perhaps competitors) wishes the new hierarchy of Norman, Rowe McDonald et al well as M&S embarks on another reorganisation which will see food emphasized and global expansion switched off. Investors need to slow the escalators and give them time.
Trump effect
AS drivers fill up their tanks in the coming days, they might want to acknowledge Donald Trump’s role.
The end of Barack obama’s war on big energy and pipelines stimulated a boom in American production with reluctant explorers, including BP, drilling again in the Gulf of Mexico. It may not be the best of outcomes for investors in BP and Shell, which have just reported a bumper first quarter, but for consumers, businesses and the overall economy it is a real plus.
The sharp drop in crude prices through the $50 floor towards $40 a barrel should be an economic boost and send analysts back to their spreadsheets. High energy costs have been one of the main causes of surging inflation and the squeeze on household incomes. The downward pressure on consumption should ease at a time when confidence in manufacturing, construction and services is picking up.
Fascinating to see what the Bank of England makes of this on Thursday when it delivers the quarterly Inflation Report.
Playing politics
GOLDMAN Sachs’s boss Lloyd Blankfein is a great survivor of repeated scandals and the financial crisis.
It would be nice if the American investment banker would shut-up as Britain goes to the polls. His warning that the City may ‘stall’ during Brexit negotiations sounds very much like the ‘experts’ before the referendum vote last year. As for moving staff to the Continent, that is simply contingency planning of the kind being done by most financial firms. Much the same threat was made to vanish away intrusive bank taxes.
Fake news or what?