Nick Bubb's verdict: What can Marc Bolland do to improve confidence in M&S?

If you were in the highly polished shoes of CEO Marc Bolland what would you do to improve investor confidence in the ability of M&S to increase its profitability and turnaround its underperformance?

Well, Friday evening apparently saw him striding the pavements of Oxford Street to see if his many competitors were upping the pace of promotional activity, so he was able to say at the results meeting today that the amount of competition in the key Christmas period is unlikely to be much less tough than it was a year ago. And he was able to spot enough women’s military coats being worn to pronounce that one of M&S’s key fashion looks this autumn has been very much on trend.

So Marc Bolland scores points for being on top of the marketplace and for working hard, but he will be judged in the end on his record in improving M&S’s disappointing profits level and the sympathy of the City for his predicament in undertaking such a thankless task is beginning to be eroded.

Clearly, every little bit of accounting magic helps, so Finance Director Alan Stewart manfully stepped up the plate by restating last year’s interim profits so that the fall this year emerged as only 6% rather than 10%. And a surprising tick down in the depreciation charge and a surprising tick up in the contribution from M&S Money also did their bit to help the group profits cause, although the benefit here got rather lost in the disappointing profit from the much-vaunted International operation in the first half.

Of course, when things are not going well if always helps to rubbish your predecessor and lament the appalling legacy of under-investment in stores, systems and distribution that Marc Bolland inherited back in 2010 and we do seem to be hearing that being shouted a little bit more loudly now that time has past since Stuart Rose walked off into the sunset.

However, such excuses about the past also wear thin after a while, as investors want to hear about the future. And it is customary to point to the inevitably rosy outlook 2/3 years down the line when all the investment in new stores, systems and distribution facilities is doing the trick.

And yet another management reshuffle in the General Merchandise team is also another reason to ask for more time for them to work their merchandise magic on the womenswear ranges for next autumn.

In the short term, as result of all of the above, the pressure on Marc Bolland has in fact eased a little, helped by a decent performance from the Food business in Q2 and some welcome autumnal weather. The clouds have parted for M&S and a watery sun is peaking through. But the storm clouds could easily return, unless the UK economy enjoys a miraculous recovery next year.

We know for a fact that Marc Bolland prefers football to hockey, but the shape of his likely profit curve for M&S is shaped very much like a hockey stick, with a big upturn 5 years after he started as CEO.

The trouble is that he hasn’t got 5 years to prove his worth: he will stand or fall by M&S’s success in the UK next Christmas. If he can’t show M&S exiting the 2013/14 financial year with some decent profits momentum then he will fear a tap on his shoulder from the Chairman.

There are some encouraging signs on the Multi-Channel front for M&S, but there are some mildly discouraging signs from the weak returns from the current UK store refit programme, whilst the news that October trading was “volatile” is a little ominous. The problem remains that M&S is simply fighting too many battles against too many strong and fast-growing competitors. Success on any one front for M&S inevitably gets offset by defeat elsewhere.

And while the eyes of the media are on M&S’s travails, the likes of Primark and Next just get on with growing inexorably. Given the competition, M&S has to run hard just to stand still. The problem for Marc Bolland is that he is paid to do much better than preside over M&S profits standing still.