M&S’s new boss Steve Rowe has toughest job in retail
City keen to hear chief executive’s strategy to revive store’s core clothing business
Steve Rowe takes charge at M&S at a difficult time for the retail industry. Photogreaph: Toby Melville/Reuters
Steve Rowe marked his first day as chief executive of Marks & Spencer last Saturday by spending the day working at the same M&S branch in Croydon where he started his career in retail more than 30 years ago.
Then he was a 15-year-old Saturday boy working in the menswear department; now he’s the man with one of the toughest jobs in British retail, tasked with restoring growth to M&S’s flagging sales.
Rowe faces the City for the first time this week in his new role, when he presents M&S’s fourth-quarter trading figures.
Although he will have been in the top job for less than a week, the City will be keen to hear the new boss’s strategy to revive the core clothing business, particularly womenswear.
Clothing sales at M&S remained on the slide for almost the entire tenure of Rowe’s predecessor as chief executive, Marc Bolland, despite his much-vaunted five-year recovery programme.
Ahead of his first City presentation on Thursday, Rowe underlined just how vital stemming the decline of clothing is to the future of M&S by revealing he will remain personally in charge of the troubled division despite his additional responsibilities as CEO.
Rowe was put in charge of general merchandise – which takes in footwear and home as well as clothing – last July, after several years heading the successful food division. So he’s pretty familiar with the challenges of the business and clearly feels it needs his full attention.
The move raised eyebrows in the City, but there was also a feeling that the new boss’s decision might at last signal a new urgency about reviving the huge clothing operation, which has turned in only one quarter of growth in the past four and a half years.
Rowe also raised eyebrows as he appeared to take a swipe at previous management regimes at M&S by pointing to what he said was the group’s tendency to “overcomplicate” things.
“We need to work together and work smarter in order to do it, but I know that it’s achievable and that we can achieve it in a profitable way for our shareholders.” Customers would be “at the heart of every decision.”
Rowe has already made a number of changes in clothing since taking over last year, including a shake-up of the operational management team.
This is not expected to have fed through to results for the final quarter of the financial year, however, with analysts predicting yet another decline in sales. Most forecasts are for a fall of just over 3 per cent in general merchandise for the three months to end March, while food is expected to grow by around 0.3 per cent.
The decline in general merchandise will at least be an improvement on the near-6 per cent sales fall suffered over the Christmas period, a performance that doubtless persuaded Bolland to bring forward his retirement plans.
The Bolland regime was not without its successes though. The former boss pushed through much-needed improvements to the group’s creaking supply chain and oversaw the revamp of its online operation. But, apart from notable successes such as the sell-out suede skirt modelled by Alexander Chung, he failed to restore M&S’s fashion credentials, its stock availability issues or its reputation for being over-priced.
Analysts will be keen to hear Rowe’s vision for the future, but he is unlikely to present his detailed strategic plan for the group on Thursday. He’s expected to wait until the end of May, when M&S releases its full year figures and by which time he’ll have been at the helm for two months rather than five days. Having waited more than five years for the recovery under Bolland, the City can at least give the new M&S boss a little bit longer.
Rowe takes charge at M&S at a difficult time for the retail industry. Household budgets remain under pressure and the unseasonally warm weather over the winter has not helped.
Even rival fashion group Next, which has performed consistently well in recent years, has been feeling the pressure. Last month chief executive Lord Wolfson shocked the City by warning he expects 2016 to be the toughest year since the financial crisis of 2008, a warning that sent its shares tumbling.
It was, Wolfson observed, “like walking up the down escalator”. At M&S, they know how that feels.
Fiona Walsh is business editor of theguardian.com