‘Maybe, just maybe, Marks & Spencer has turned a corner’

The ‘worst’ lasted a long time – pretty much since Stuart Rose left a decade ago after rescuing M&S from the clutches of Philip Green. Incumbent chief executive Steve Rowe and chair Archie Norman have been engaged in a turnaround programme throughout their tenures.

Some of the numbers likely to be revealed next week won’t look as if their task is over. While City consensus is that M&S’ UK food like-for-likes should advance 1.2%, clothing and home is expected to be down 34% – reflecting of course the hammer-blow of the pandemic and resulting store closures. 

However, as M&S promoted new generation leaders Katie Bickerstaffe and Stuart Machin to become joint chief operating officers on Tuesday, the language was striking.

The retailer said the management changes reflected the fact that the business “is now moving on from the ‘Fixing the Basics’ phase to reinvest in the brand and restore growth”.

Stop and think about that for a moment. Even the retailers that have delivered soaraway success over the last year, notably online stars such as Boohoo, have struck notes of caution even as sales and profits have climbed.

For M&S to definitively state that the longstanding fires have been put out and its gaze is now firmly fixed on ensuring the changes made and those to come deliver success rather than retrenchment is quite a shift. No retailer, and M&S in particular, would say such a thing unless there was confidence in an upward trajectory.

A year ago, in M&S’ annual report, Norman quoted a line attributed to Churchill: “never let a good crisis go to waste”. The mood music of today’s management changes indicates that M&S bosses are confident they have achieved that. No company would allow itself to become a hostage to fortune about improving prospects unless it was confident in making that claim.

Bickerstaffe and Machin have been crucial in setting M&S’ new path and modernising the business.

Neither let the grass grow beneath their feet. Bickerstaffe, a former Somerfield and Dixons Carphone director who managed even before Covid to balance the demands of life and work by working four days a week, has led the launch of MS2, the retailer’s digital business with license to think and act like a pureplay.

On the food front, M&S’ creation of a joint venture with Ocado is proving invaluable as online grocery sales soared during lockdowns. Machin has re-established M&S’ price authority and changed shoppers’ perceptions in other ways too, through in-store theatre that puts food front of stage and prompts reassessment of the range to position it as a place to do a weekly shop, rather than pick up a convenience meal.

Outside the ranks of M&S, there are signs that change is being noticed and opportunity knocks. Kantar fashion market share data cited by broker JP Morgan, for instance, is encouraging.

The most recent figures showed, in a battered apparel market, that M&S “re-took 38bps of share” year on year. That may reflect the exit of competitors such as Debenhams, but also improvements at M&S. JP Morgan described M&S’ showing as a “positive surprise” and one that was “well ahead” of forecast.

As performance ticks up and promotions are made at M&S, the thoughts of some inevitably turn to leadership succession - is Rowe preparing to hand over the reins?

No, is the message from M&S. Bickerstaffe and Machin’s promotions will allow Rowe to devote his energies, alongside CFO Eoin Tonge who takes on extra strategic responsibilities, to creating a business ready for whatever tomorrow might bring, relieved of the need primarily to pour water over the bushfires formerly breaking out across the business. 

Rowe’s work is unfinished – he has to make M&S relevant again

As M&S – like the nation, fingers crossed – emerges from the ravages of Covid, leadership succession is understood not to be top of the board’s considerations.

And why would Rowe want to go anyway? His work is unfinished. If the changes being made are starting to work, he would certainly want to stay so that he could say, as some of his predecessors would have loved to, that he has made M&S relevant again and future-fit. If he does that he will take his place in the M&S and retail pantheon.

A marathon, not a sprint

Where M&S must be careful, as it talks of a shift from fixing to building, is to stamp down on any hint of complacency that may emerge. It’s great that it has proved agile and adaptive, but others have too.

Retailers such as Amazon, Asos and Boohoo have grown during the pandemic and for a younger generation of shoppers they are the go-to brands. M&S’ journey to recovery is unfinished.

Rowe once described his task as a marathon. That prompted his peers to quip: ”Can you see the Cutty Sark yet?”

Maybe, finally, he can. If so, that will be something worth celebrating after such a punishing year for the retail industry.