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Thursday, 7 January 2016

Marks and Spencer Chief Executive Marc Bolland to Quit

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Marks and Spencer chief executive Marc Bolland is to step down in April, the company has said, as it announced its Christmas results.

Mr Bolland will be succeeded by Steve Rowe, executive director of general merchandise.

Third-quarter sales of general merchandise were down by 5.8% for the thirteen weeks to 26 December.

But M&S said it had an "excellent quarter" for food, with record sales in the Christmas week.

Investors reacted positively, with Marks and Spencer shares rising more than 1% in early trading.

There was no pressure on Mr Bolland to leave from shareholders or the board, Marks and Spencer chairman Robert Swannell said on a conference call with reporters. Mr Bolland is retiring after six years in the role.

"There has been absolutely no pressure at all on Marc [to leave]," Mr Swannell said, adding that succession planning had been "rigorous".

Succession planning had not been done "quickly on the back of an envelope", but instead had been planned "for years", Mr Swannell added.

He declined to discuss whether Marks and Spencer had considered external candidates, but said the firm had used "external benchmarking" during a "thorough rigorous process" to select candidates.

Mr Bolland informed the board in the summer of 2015 of his intention to leave in mid-2016, Mr Swannell said.

Mr Rowe will receive a salary of £810,000 from 2 April 2016 as part of his chief executive remuneration package, the firm said.

Mr Rowe has been employed by the firm for more than 25 years, and has had roles including director of retail and e-commerce and positions in general merchandise.
Christmas sales

In Marks and Spencer's third quarter, the firm said its general merchandise sales, which include clothing, were "disappointing".

The drop in sales was put down to "unseasonal conditions and availability". Retailers such as Next also blamed unseasonably warm weather in December for disappointing sales.

However, food sales for Marks and Spencer were up 0.4% in the third quarter, and the retailer said it had record sales in the Christmas week, up 17%.

Online sales rose more than 20% in the quarter, it added.

Marks and Spencer has had recurrent problems in general merchandise for a number of years. For example, in the six months to 26 September 2015, sales fell 1.2%.

Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said that the change at the top could lead to some uncertainty.

"There will be some inevitable uncertainty after any change at the helm, although the new chief executive - although an M&S lifer - has been in charge of general merchandise (GM) for only a relatively short period," Mr Hunter said.

"The wider issue could be that despite attempts to revitalise GM for some considerable time, little of note has materialised, and it could well be that Marc Bolland has decided that a fresh pair of eyes are required."

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