Will Steve Rowe be able to turnaround Marks & Spencer?
Marc Bolland, the man who has been running Marks and Spencer for six years, will exit following difficulties in transforming the business. After months of quashing rumours that he would be leaving, he has announced his decision to retire, and will remain CEO until the end of the current financial year on April 2,
In a trading update on the key festive period the high street giant hailed record trading in the food division, where like-for-like sales grew 5%, but the general merchandise arm of the business let the team down.
GM has remained Marks & Spencer’s Achilles heel for years so “unseasonable weather”, which the retailer blamed alongside poor visibility of stock and a decision to hold back on discounting, can’t hide a 5.8% drop in like-for-like sales over the Christmas.
Bolland denied feeling pressure to leave from shareholders in a conference call on Thursday morning, claiming that they recognise the business is a healthy one. Still, it seems Bolland is jumping before he’s pushed.
There’s no taking away that M&S recorded the best Christmas ever delivered by the food category. Perhaps it’s fitting, then, that after “the most rigorous succession planning,” Bolland will be succeeded by Steve Rowe.
Rowe has been with the British retailer for over 25 years, and a Board member since 2012. Before joining the Board, he worked in a range of senior positions across the business including Director of Retail and E-commerce and various positions in General Merchandise.
In 2012 he was appointed by Marc Bolland to the Executive team as Executive Director, Food as well as the board. In particularly difficult market conditions Rowe led the Food business to produce 12 consecutive quarters of like for like growth, grow its margin and all its key performance metrics and “set out a path for further profitable growth”.
In July 2015, Rowe was appointed Executive Director, General Merchandise with a mandate to improve the overall performance of that business.
In the 13 weeks to 26 December, the food category delivered 5% growth in like-for-like sales, a testimony to the quality of the product.
“Marks and Spencer general merchandise sales suffered from poor availability but also from lower demand due to the unseasonably warm weather,” comments James McGregor, a consultant at Retail Remedy. “Something doesn’t quite add up there. Wrong stock, wrong place, wrong time?”
“Marks and Spencer has secured its own share of the seismic shift to online retail this Christmas”, sales were up by 20.9%, “but it is off a lower base than Next or John Lewis, and is still trying to make up ground lost from its faltering website relaunch.
As extremely slick as the Marks and Spencer fashion website appears on the surface, when it is dunked by the customer, it comes up as a plain old custard cream,” McGregor added.
Rowe is a skilled retailer, particularly from an operational/logistics point of view. From a CEO standpoint he’s understandably unproven but the outlook for Rowe driving the business is optimistic. He will, however, need to make some game-changing decisions in order to turnaround the high street stalwart.