M&S boss to quit as clothing sales fail to recover
Bolland, 56, would retire on 2 April and be succeeded by Steve Rowe, a 27-year company veteran who heads its general-merchandise unit, M&S said on Thursday as it reported a slump in holiday sales.
Bolland's departure comes after he struggled to stem a near-continuous decline in clothing sales.
M&S fashions have failed to inspire shoppers, which prompted several management shuffles at the clothing unit, while Christmas sales were hurt by a shortage of some products. The lack of revenue growth has irked shareholders, with about 6% opposing Bolland's re-election at last year's annual general meeting.
"Sustained evidence of sales delivery has proved to be so elusive and ultimately needs to change," Clive Black, an analyst at Shore Capital, said in a note.
Bolland had led the company "through a period of necessary change", chairman Robert Swannell said.
His tenure has been marked by a succession of management changes, with both Kate Bostock and John Dixon leaving after failing to boost clothing sales while in charge of the general-merchandise unit.
That role is currently filled by Rowe, who replaced Dixon last year and will earn an annual salary of £810,000 as CEO. Rowe, 48, had previously headed the company's food unit, which in contrast to clothing has consistently performed stronger than the wider UK grocery market.
"No one knows M&S better than him and we have no concerns from an operational point of view," Tony Shiret, an analyst at Haitong Securities, said in a note.
During Bolland's tenure, M&S introduced a new website, modernised its information systems and revamped distribution, having fallen behind rivals as more shoppers shifted to online ordering.
Bolland also overhauled the retailer's supply structure - making M&S less dependent on middlemen and sourcing more of its products directly from manufacturers - and shifted the retailer away from a culture of discounting. "Marc Bolland has done a good job in running M&S consistently along a modernising agenda during a very difficult period," Shiret said.
Speaking on a conference call, Bolland denied that investor pressure was behind his decision, saying he always expected to serve five to six years as CEO.
"Our profitability over the last two years is up by 10% and the sector's profitability is down by 20%.
"Shareholders recognise this company is a very healthy one," Bolland said
Still, the general-merchandise unit had a "disappointing" Christmas, M&S said.
Same-store sales in the division, which accounts for about 40% of revenue and mostly comprises apparel, fell 5.8% in the 13 weeks ended 26 December.
M&S's food division was once again a relative bright spot over Christmas, despite declining food prices.
Same-store sales rose 0.4%, compared with the median analyst estimate for a 0.5% increase.
Source: I-Net Bridge
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