Marks & Spencer could become the next Sports Direct

The issues that have emerged at the two companies ultimately hail from a similar place – the overvaluing of executives at the expense of staff, without whose efforts those executives’ bonuses wouldn’t be paid

James Moore
Saturday 31 December 2016 16:27 GMT
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Chief executive Steve Rowe is promised a bonus that could take his annual pay to £4.2m
Chief executive Steve Rowe is promised a bonus that could take his annual pay to £4.2m (Getty)

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It has been through some tough times recently, but Marks & Spencer has more or less retained its status as a pillar of middle-class respectability – even if the middle classes no longer buy their clothes there. So surely no one in their right mind would dare mention this once unimpeachable retailer in the same breath as Sports Direct? Would they?

Call me crazy, then. Because when the bad business awards for 2016 are handed out, you can make a case for at least putting M&S on the shortlist, where it would sit alongside Mike Ashley’s battered discounter (the odds-on favourite to win).

Now before you say I'm an idiot (and before the M&S communications people start calling The Independent’s lawyers), I agree that, on the face of it, the two businesses are very different animals. No one would dream of accusing M&S of failing to pay the minimum wage, for example, which is the allegation that ignited a firestorm at Sports Direct. You won’t be seeing a parliamentary report accusing it of operating something like a “Victorian-style” workhouse either. That is what happened to Sports Direct in 2016.

But, if you consider what has been happening at M&S over the past year, you’ll see that it has quietly accumulated quite a charge sheet – one that has led to the company facing considerable criticism from at least one MP (Labour’s Siobhain McDonagh), from the shop workers union Usdaw, which says the company won’t engage with it, and from disability campaigners too.

Sports Direct MPs report

The union and MP have both highlighted changes to employee contracts that will increase wages for the majority of staff yet strip some of the longest-serving and most loyal employees of extra pay for working unsociable hours. Needless to say, some of them rely on that money and, even though a transition package has been offered, the union claims that a sizeable number of workers will still lose out at the end but are nevertheless being railroaded into signing up to it.

While that row was rumbling, it emerged that the recently appointed M&S chief executive Steve Rowe, who started out stacking shelves at the company, was unlikely to suffer any such indignity. Far from it. His boardroom colleagues put together a £1.8m bonus package to “incentivise” him to improve profitability at the retailer that could take his annual pay to £4.2m.

Needless to say, improving profitability is not something that he should need any incentivising to do; it’s a basic part of a CEO’s job, for which Rowe is paid a not inconsiderable salary.

McDonagh and Usdaw also criticised the company for failing come clean over which stores are slated for closure as part of Rowe’s attempt to improve the company’s future prospects by pivoting to focus on its fancy food, as opposed to the womenswear that fewer and fewer women want to be seen wearing.

Want more? How about the company’s high-handed response to a mother who wanted it to put a hoist in her local store (and the other large outlets that survive the cull) so her seriously disabled son could make use of the disabled toilets. These are required by more people than you might think.

Laura Moore (no relation) shared the letter that was sent to her with me after she challenged the company’s policy. It insincerely expressed “sympathy” with her plight, before giving her the brush off with a lot of legalese about why its stance was within the law. The point being that that doesn’t make it right.

Would she have got anything different from her local Sports Direct? Perhaps not. But while such a response wouldn’t be terribly surprising from the latter, most M&S customers would, I’d imagine, expect rather better from it given its brand, erm, “values”.

EMBARGO 9PM 11/11: Marks and Spencer Christmas Advert 2016

It’s worth noting that Changing Places, the national campaign that seeks to get more such equipment installed, says that some of the company’s food retailing rivals, the big supermarkets, have started to talk with it.

What does all this tell us? Perhaps that M&S and Sports Direct, which both have a habit of turning a tin ear to their critics, aren’t quite as different as their reputations and brands might suggest they are. The issues that have emerged at the two companies ultimately hail from similar places: the overvaluing of executives at the expense of staff, without whose efforts those executives’ bonuses wouldn’t be paid; the increasing isolation of those executives from the world around them; a failure to listen to and genuinely engage with critics, and customers, a pervasive hubris at senior levels. And so on.

So no, M&S isn’t going to win, shall we call it the “Bizzie”, in the worst retailer category. I’m still giving that to Sports Direct and I don’t think anyone outside of Shirebrook would disagree with my judgement there.

But I still feel comfortable enough, in the light of the stories that appeared in 2016, to add M&S’s name to the list of nominees.

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