Steve Rowe’s warts-and-all M&S farewell just enhances credibility for investors
Compare and contrast. Here’s Marks & Spencer’s previous chief executive Marc Bolland giving himself a pat on the back when he checked out in 2016: “I have done the heavy lifting that was needed. I am very pleased with what I have done over the last years and think I have built the foundations.”
The declaration of a weightlifting triumph wasn’t convincing at the time, and Bolland’s efforts were soon exposed as a light limbering-up exercise at best. Familiar problems – in fashion, logistics and overseas – re-emerged because they never went away. By 2018, Steve Rowe, the successor now departing himself, launched a “facing the facts” strategy that was plainly overdue.
In that context, Rowe’s farewell assessment on Wednesday was infinitely better because it was nuanced. Yes, he also said M&S had “fundamentally changed” on his watch, which is true thanks to store closures, a retreat from France, the online food partnership with Ocado and the axing of tired in-house fashion brands. But Rowe also spelled out the items left undone.
His list wasn’t short. Core technology in the clothing and home department needs an upgrade. Both sides of the business need to invest in their supply chains – the food operation was described as “less efficient” than rivals’. Some of the stores are still “out of date and poorly located”. The reduction in floor space dedicated to clothes hasn’t kept pace with shift in demand towards online. Top marks for honesty.
Rowe has been unlucky on his last lap because the looming cost of living squeeze has almost halved M&S share price since January. The two profit upgrades last autumn have almost been forgotten. But M&S is clearly in better shape than in the recent past, not least because cash is flowing again,
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