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Marks & Spencer's deadline to find wow factor looms Marks & Spencer's deadline to find wow factor looms
(4 months later)
A glorious autumn for Marks & Spencer? It had better be if Marc Bolland, the chief executive, is to keep his job. Actually, the Dutchman needs next year's spring collections to sparkle too if he is to convince the City he is still the right man for the job.A glorious autumn for Marks & Spencer? It had better be if Marc Bolland, the chief executive, is to keep his job. Actually, the Dutchman needs next year's spring collections to sparkle too if he is to convince the City he is still the right man for the job.
His shareholder audience is sceptical. M&S sales in general merchandise – clothing and homewares – have fallen for seven quarters in a row. Bolland must reverse the trend, and then accelerate.His shareholder audience is sceptical. M&S sales in general merchandise – clothing and homewares – have fallen for seven quarters in a row. Bolland must reverse the trend, and then accelerate.
The clothing ranges unveiled have been billed as a make-or-break moment because Bolland himself has encouraged the idea. After last July's dreadful trading figures, he took the standard action of an under-fire chief executive: he changed his deputies and promised that his new star-players would work wonders.The clothing ranges unveiled have been billed as a make-or-break moment because Bolland himself has encouraged the idea. After last July's dreadful trading figures, he took the standard action of an under-fire chief executive: he changed his deputies and promised that his new star-players would work wonders.
John Dixon, who had revitalised M&S Food, was made head of retail and Belinda Earl, one-time saviour of Debenhams, was recruited as style director. Give them a year to work their magic, said Bolland, because that's how long it takes to design and source a complete overhaul of the ranges and get the products into stores. Shoppers won't see the new lines until the summer but the hype starts now. M&S desperately needs a win.John Dixon, who had revitalised M&S Food, was made head of retail and Belinda Earl, one-time saviour of Debenhams, was recruited as style director. Give them a year to work their magic, said Bolland, because that's how long it takes to design and source a complete overhaul of the ranges and get the products into stores. Shoppers won't see the new lines until the summer but the hype starts now. M&S desperately needs a win.
The last time M&S fashion was being critically and commercially applauded was 2007 and 2008, the high points of Sir Stuart Rose's time as chief executive. Group profits passed £1bn for only the second time and the reinvention of M&S, after its escape from Sir Philip Green's takeover bid in 2004, was deemed a triumph.The last time M&S fashion was being critically and commercially applauded was 2007 and 2008, the high points of Sir Stuart Rose's time as chief executive. Group profits passed £1bn for only the second time and the reinvention of M&S, after its escape from Sir Philip Green's takeover bid in 2004, was deemed a triumph.
It didn't last. Profits fell with the arrival of recession and the rise of online shopping exposed M&S as horribly under-invested in modern IT and its distribution systems.It didn't last. Profits fell with the arrival of recession and the rise of online shopping exposed M&S as horribly under-invested in modern IT and its distribution systems.
The feel-bad factor intensified as Rose's latter years were punctuated by rows with shareholders over boardroom remuneration and concerning his dual role as chief executive and chairman.The feel-bad factor intensified as Rose's latter years were punctuated by rows with shareholders over boardroom remuneration and concerning his dual role as chief executive and chairman.
Bolland was hired in 2010 with the reputation as the hottest retailer in the UK. He had fixed Morrisons, the supermarket chain, and came with a £15m signing-on package to buy him out of his contract there. Early results were good: the food division quickly moved from laggard to leader in terms of gains in sales.Bolland was hired in 2010 with the reputation as the hottest retailer in the UK. He had fixed Morrisons, the supermarket chain, and came with a £15m signing-on package to buy him out of his contract there. Early results were good: the food division quickly moved from laggard to leader in terms of gains in sales.
But clothing is where M&S chiefs earn their bucks. With 11% of the market, the company remains the biggest in the UK and a successful womenswear business is critical to driving the overall business. The clothing sales figures went negative early in 2011.But clothing is where M&S chiefs earn their bucks. With 11% of the market, the company remains the biggest in the UK and a successful womenswear business is critical to driving the overall business. The clothing sales figures went negative early in 2011.
In the search for explanations for the missing "wow" factor, we've heard everything. Did M&S become too obsessed with the "disposable fashion" trend? Have all the younger shoppers gone to Asos? Did M&S fail to stock winning lines in sufficient quantities? Is M&S's slow start in online retailing another factor?In the search for explanations for the missing "wow" factor, we've heard everything. Did M&S become too obsessed with the "disposable fashion" trend? Have all the younger shoppers gone to Asos? Did M&S fail to stock winning lines in sufficient quantities? Is M&S's slow start in online retailing another factor?
All of the above, probably.All of the above, probably.
However, in the eyes of City, the theorising stops now. Bolland was granted time (and a huge capital expenditure budget) because there's no point firing a chief executive who promises a three-year turnaround before the three years are up.However, in the eyes of City, the theorising stops now. Bolland was granted time (and a huge capital expenditure budget) because there's no point firing a chief executive who promises a three-year turnaround before the three years are up.
Thanks to the food division, M&S's overall performance has been weak though not horrendous.Thanks to the food division, M&S's overall performance has been weak though not horrendous.
But judgment day on M&S clothing is now.But judgment day on M&S clothing is now.
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