Exit with £3million, boss who struggled to make M&S sparkle
THE boss of Marks & Spencer unexpectedly announced he is to quit yesterday after a poor Christmas and years of disappointing fashion sales.
Marc Bolland, 56, will retire with a cash windfall of more than £3million.
In his five and a half years as chief executive of M&S – which is still the UK’s biggest women’s clothing chain – he has been unable to revive sales of female fashions.
Despite the huge success of its food lines, the vital Christmas trading period saw a 5.8 per cent slump in same-store sales of general merchandise, which includes clothes.
The news that Mr Bolland is stepping down in April triggered an initial 4.9p rise in the firm’s share price before it fell back.
The Dutchman, who took over from Sir Stuart Rose in 2010, will receive pay, pensions, bonuses and share options worth millions of pounds through a notice period that runs until January next year.
Last autumn he batted away suggestions he would be leaving, prompting reports he would be in charge for another two years. He groomed his successor, Steve Rowe, who has been with M&S for more than 25 years. Mr Rowe will be paid £810,000 a year plus benefits and bonuses – less than Mr Bolland’s £975,000 salary.
M&S has been through a series of setbacks despite spending a fortune recruiting Alexa Chung, Rosie Huntington-Whiteley, Helen Mirren and Darcey Bussell to model or wear its designs. Except for one quarter at the start of 2015, fashion sales have fallen consistently over the past five years.
However food sales were up 3.5 per cent ahead of Christmas – as rival supermarkets such as Waitrose were suffering falls. More than 50 per cent of sales and profits at M&S now come from groceries.
Some stores’ food halls are being expanded and the space devoted to fashion reduced as grocery sales boom and clothes shoppers shift online – more than 20 per cent of all clothing and shoes are now bought over the web, often to be collected in-store.
Mr Bolland said yesterday that he had only ever planned to stay at M&S for six years and had ‘developed’ Mr Rowe as his successor.
‘I think a CEO should stay around six years in a role and that’s a perfect time,’ he told Radio 4’ s Today programme.
‘Last summer I spoke to my chairman and the board to give my intents that 2016 was a year for transition, and we have done very good succession planning.’
He said it had been ‘a huge honour to lead one of Britain’s most iconic companies’.
M&S chairman Robert Swannell insisted there was ‘absolutely no pressure’ on Mr Bolland to leave, adding that the ‘rigorous’ process of planning to replace him as chief executive had been going on for years.
‘Over the last six years Marc Bolland has led Marks & Spencer through a period of necessary change,’ he said.
Mr Rowe said his appointment as successor was a ‘great privilege’.
Mr Bolland, who previously worked for the brewer Heineken, was brought to M&S from the supermarket chain Morrisons with no experience of running a fashion business.
His tenure has been marked by repeated claims that M&S women’s fashions were improving but these have not been borne out by results. The company blamed the mild weather for falling sales at Christmas, particularly for coats, woollens and boots. It also admitted poor stock availability on some lines.
Other fashion chains also saw sales
fall, but by less, because of the relatively warm December.
Mr Bolland, who is credited with doing a lot of work to cut costs, which have boosted M&S profit margins, could be followed out of the door by a number of his lieutenants.
There is a question over the futures of style director Belinda Earl – recruited on a six-figure salary for a two to three- day week – and Laura wade Gery, hired from Tesco with a £4million golden hello to relaunch the M&S website. She is currently on extended maternity leave.