M&S forced to look within for next chief

Investors run slide rule over candidates for CEO

Three Marks & Spencer managers yesterday gave their pitch for the top job at an investor day in which the group announced a £1bn investment in overhauling its IT and supply chain.

Earlier in the day the group suffered a blow as one of the leading external candidates ruled himself out of the running to take over as chief executive when Sir Stuart Rose relinquishes the role of executive chairman next year.

Charles Wilson, chief executive of the cash-and-carry retailer Booker, ruled himself out as a candidate, saying: "I'm 100 per cent committed to Booker, everybody knows it, all the headhunters know it, so it's not the M&S job, it's not any job I'm in the market for."

Mr Wilson was Sir Stuart's right hand man at Marks & Spencer before he took over at Booker in 2005. He has a long-standing relationship with the retail boss and was seen as an extremely strong candidate.

His statements echo those made by another frontrunner, Andy Bond, chief executive of Asda, who said he was not interested in the job last month.

Other potential candidates to have played down links with the job include Justin King, chief executive of Sainsbury's, and his counterpart at Morrisons, Marc Bolland.

M&S shareholders have been uncomfortable with Sir Stuart's role as executive chairman, which combines both chairman and chief executive. Many fear similar problems to ITV, whose attempt to find a successor for its executive chairman, Michael Grade, has been plunged into turmoil. Sir Stuart will become non-executive chairman after a new chief executive is appointed, and he will leave the group by July 2011.

M&S yesterday held an investor day in London in a training store in White City for the first time in a decade.

The company said it was designed to "provide greater detail on business priorities, Project 2020, and its role in delivering the group's current strategy".

Most attendees were most interested in running the slide rule over the potential internal candidates. Sir Stuart had even called it "M&S has got talent". Those in the frame were the finance director, Ian Dyson, John Dixon, the head of food, and Kate Bostock, head of clothing. All three stood up and gave their vision for the future of their businesses.

Mr Dyson presented Project 2020, saying: "We've established a long-term vision for where we want to take the business which we believe will create long-term sustainable growth." The programme will invest £1bn in IT and the supply chain in the next five years, with £250m already spent. The business expects the move to bring in £250m by 2015.

M&S is to overhaul its website and is targeting expansion in Eastern Europe, as well as building a business in the emerging markets of China and India.

Sir Stuart said the company was in "pretty good shape" yesterday, but added that there were tough times ahead. He admitted to having considered handing the food business to an external company to run "in one of my madder moments... but no, we are not going to do it".

However, M&S shares fell more than 5 per cent over the space of two hours, before closing down 4 per cent at 346.9p, with observers speculating that investors had been disappointed by the lack of big news.