Marc Bolland quits: M&S have hard fight ahead to regain cutting edge

Analysis

Profits have fallen despite heavy investment during chief executive Marc Bolland's reign at M&S (AFP/Getty )

Steve Rowe, the new chief executive at Marks & Spencer, has been in the business for long enough to have seen seven bosses run the grand old dame of High Street fashion.

His 25-year M&S career means he was even there long enough to remember when his father Joe, also then a board member, told a packed annual general meeting how sexy his wife looked in her M&S underwear.

When Mr Rowe joined as a trainee in the late 1980s, the executive chairman Lord Rayner was already battling with the problem that the St Michael brand was tiring badly. He battened down costs, spent heavily on store refurbishments, and expanded overseas with the takeover of Brooks Brothers in the US.

Then came the eight-year reign of Sir Richard Greenbury, who took profits to beyond £1bn. Saint Michael was faded out of the clothing as he tried to make the ranges more current.

But he neglected the look of the stores and drove the profit margins too hard. The cost was that the stores looked tired and the fashion ranges followed suit. Some analysts still trace M&S’s problems today to the migration of customers in the latter days of his rein. An unedifying period under Peter Salsbury and Luc Vandevelde saw M&S move towards buying from overseas suppliers in the hope of keeping up with more fashionable rivals. But older shoppers complained at their lack of patriotism, declining quality and the continuing dowdiness of the stores and clothes.

Meanwhile, rivals like Arcadia’s Top Shop and foreign incomers like Gap, Zara and Mango were becoming increasingly entrenched, making it the norm for affordable catwalk styles to be on the High Street within months of their appearance in the shows of Dior or Valentino.

Marks’s younger customers vanished, and even their middle aged parents got caught up in the excitement of being able to afford to follow the designer styles at H&M. This pattern has only got worse. Despite the efforts of Sir Stuart Rose, who spent a fortune on long-neglected store refurbishments, M&S still failed to make significant inroads into winning back clothes shoppers.

Worse still, another new threat exploded – the Internet. M&S was, as ever, late to react to the revolution of online sales.

Marc Bolland, after a shaky start, got the internet store fixed and hired a good new team to spruce up the fashion ranges. The fabled Lindsey brothers – two Hong Kong based sourcing specialists, have improved the supply chain and boosted margins.

But still the sales keep falling.

Some analysts are now suggesting M&S’s fashion buyers should give up on attracting younger women. As one says: “Abandon the 40-somethings and focus on their mums. Find a niche, and do it well.”

Others argue that the pensioners’ market is too small to bet such a grand name as M&S on.

History, however, tells us only the specialists thrive. With the eyes of his former bosses watching everything he does, Mr Rowe must decide if he has the nerve to take such a dramatic step, or if he should continue trying to make M&S a fashion store for everyone. That may be an impossible task.