M&S turnaround will take time says CEO

By

Sandra Halliday

Published
Mar 6, 2018

It may sometimes seem that M&S’s turnaround has been going on for the last two decades but CEO Steve Rowe thinks it will be some time yet before the UK retail giant is out of the woods.

He has told investors that the turnaround is a “marathon” and that the business is “at miles three to four” out of that 26-mile race.

City AM reported a note from analysts at Shore Capital that quoted Rowe being brutally frank and saying the retailer is in it for the long haul with the new thinking at M&S being more about cultural change than throwing money at products and stores.

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The investor meeting at which he spoke came after some top level changes at the firm. These have seen the man who helped turn Asda around in the 1990s - Archie Norman - joining as chairman and ex-Halfords chief Jill McDonald brought in to oversee the clothing, home and beauty business.

Clive Black, head of research at Shore Capital, said: “Whilst much thinking has been undertaken and a new leadership team has largely been put into place, there remains much to do, which requires investor patience.

“Rowe is overseeing a more considered change programme that is capital-light, which we welcome. At the heart of its success requires necessary cultural change, something we believe the new chair will particularly assist.”

M&S is closing some stores (six will have closed this year by the end of April) and cutting space allocation for the clothing and home ops by as much as 25% as foods prove to be a more buoyant part of the business.