Anybody with the slightest interest in M&S’s success must hope that the peace proposals made by the retailer in its letter to the Association of British Insurers will bring hostilities to an end.
M&S’s concessions in the corporate governance row over Sir Stuart Rose’s elevation to executive chairman, such as Rose standing for re-election every year, should be accepted by rebel shareholders if they have any sense.
Even though the investors may not have got everything they wanted, the best that will come out of this clash is a pyrrhic victory. Each side emerges diminished. Rose, one of the most talented retailers in this country and the man on whose abilities M&S’s ongoing success at present depends, has been publicly humiliated. And shareholders, who have apparently put corporate governance compliance ahead of M&S’s high street advance, will notice the effect of any resulting turbulence where it really hits them – in their pockets.
The list of losers must surely include Rose’s potential internal successors, who will have even more hurdles to jump before being allowed to take up the top job. During this row, their capabilities have been dismissed: the argument goes that, if Rose has to become executive chairman, then company insiders aren’t ready to succeed him and, if they’re not ready now, they won’t be ready in three years.
This has been a fight without winners. Is this row really the priority that M&S and its shareholders should be concentrating on? Isn’t there a trading downturn going on?
Tesco under the spotlight
Results from Tesco are due in just over a week and will be the subject of even fiercer scrutiny then usual.
The retail giant has been on the receiving end of lots of questioning comment lately. Not from the usual suspects, but a far more unusual quarter – the City.
Some analysts are worried about slowing UK market share trends and have expressed doubts about the success of flagship US venture Fresh & Easy.
As was demonstrated at M&S some years ago, the most powerful retailers can fall victim to their own success. Some observers reckon that Tesco is approaching that point.
Is that what the prelims on April 15 will show? Don’t bet on it.
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