Industry observers have largely welcomed the news that Marks & Spencer’s general merchandise boss Steve Rowe is to succeed embattled chief executive Marc Bolland when he steps down in April. However many have warned that a tough challenge lies ahead for Rowe as he tries to turnaround the troubled fashion business following a 5.8% drop in like-for-like general merchandise sales for the 13 weeks ending December 26.
Kate Calvert, analyst at Investec, said: “It was supposed to be the quarter when M&S finally demonstrated general merchandise was back on track. However, in keeping with others, the weather has spoilt the party, though self-help and a more flexible business model has limited the profit impact. The change in CEO is likely to be well-received. Steve Rowe, an M&S ‘lifer’, is known by the market and is currently head of general merchandise. He has significant experience across the whole business having also run the food division and store operations and his appointment is likely to be well received in our view.”
John Ibbotson, director of retail consultancy Retail Vision, said: “The man chosen to succeed Marc Bolland is well-respected within the business and can rightly take the plaudits for delivering 12 successive quarters of growth as head of M&S’s food operation. But Steve Rowe now faces a far tougher challenge as CEO of what has become a truly schizophrenic empire. While the food operation’s distinctive positioning means its prospects are good, M&S’s clothing business has become a complete also-ran. Solving the puzzle of a business with two divisions heading in opposite directions eluded his predecessor. And it’s unlikely he will be given long to find a solution.”
James McGregor, partner at retail consultant Retail Remedy, said: “Some may say that Marc Bolland’s departure is overdue but there is no taking away from him the remarkable Christmas delivered by the food category. Marc Bolland’s successor Steve Rowe must now do what has eluded Bolland for so long and translate the winning food formula into general merchandise. Marks & Spencer general merchandise sales suffered from poor availability but also from lower demand due to the unseasonably warm weather.”
Julie Palmer, partner at Begbies Traynor, said: “General merchandising continues to be the Achilles heel for M&S, with a -5.8% drop in like-for-like sales over what has been another disappointing peak trading period for the ailing high street retailer. Failure to offload its usually popular winter stock prompted still more significant discounting in the run up to New Year, leading M&S to abandon its usual strategy of avoiding unplanned promotions in favour of protecting profit margins. While M&S continues to be buoyed somewhat by the robust performance of its food business, it is yet again under increased pressure to kick-start growth in the clothing division during 2016.”
Anusha Couttigane, Senior Consultant at Conlumino, said: “Marks & Spencer is expected to make some essential changes after CEO Marc Bolland announced his resignation following another challenging Christmas. Executive director of general merchandise, Steve Rowe, will now take the helm as CEO. An M&S lifer with 25 years’ service to the company, he certainly has his work cut out. Yet with a unanimous nomination, he starts his new role with the full backing of the board.”
Independent retail analyst Richard Hyman said: “The change at the top is very welcome. Steve Rowe will bring a significant change in style. He has a unifying, collegiate approach and most important of all, he is a retailer. He is an old school, down to earth, merchant. He favours substance over style, another very welcome change. His first task will be to stem the haemorrhaging of market share; turning it around is much further in the distance.
“The appointments at M&S have all been very political in recent years. As for who replaces Steve in the GM role, it would be nice to see his successor being less political and more about what they bring to the job.”