M&S: Marks & Spencer’s choice of Marc Bolland as chief executive ticks three important boxes. The UK retailer has been talking up global ambitions – Bolland has international experience from working at Dutch brewer Heineken. Another goal is to sweat the M&S brand more – Bolland is a longstanding marketing man. And M&S is just emerging from recent years of weak performance – Bolland spent the last three years kicking UK food retailer Wm Morrison into shape.
Arguably, that triple-play makes Bolland a great hire for M&S, even though Morrison is his only retail experience. But that was a great success. Taking over a company in dire condition, he oversaw double-digit increases in pre-tax profits and dividends. But great credentials don’t guarantee success, especially at a company like M&S, which has spent much of the last five years fire-fighting and tackling intensifying competition in its home market.
Bolland’s appointment almost certainly ushers in a more adventurous era. His priority will be to find sources of long-term growth. This will mean taking substantial operational and business risks. M&S shareholders know all too well that the company has come a cropper expanding overseas before. And no brand is infinitely extendable.
The market reaction – M&S shares gained 7 per cent while Morrison’s fell 5 per cent – may be applause for Bolland. But it could simply be relief that M&S’s long-running search is over and concern that Morrison now has its own succession problem.
M&S’s likely shift to expansion mode makes it all the more important that the board is both robust and well-constructed. Sir Stuart Rose, whom Bolland replaces, has heralded a return to “normal governance” – a reference to his unpopular stint combining the roles of chief executive and chairman, and to gripes about weak succession planning. The first step will be the appointment of a strong independent chairman. If M&S gets that right too, investors will be better prepared for the upcoming exciting ride.
