Magazine article Marketing

Mark Kleinman on Marketing and the City: The Ins and Outs of M&S

Magazine article Marketing

Mark Kleinman on Marketing and the City: The Ins and Outs of M&S

Article excerpt

Sir Stuart Rose's exit looks likely to be sooner rather than later but where is the obvious successor?

Sir Stuart Rose must be wondering what he must do to get the City to love him.Last week's trading update, which revealed a fall in Marks & Spencer's sales, although by less than expected, has done little to diminish the sense that Rose will step down long before the mid-2011 deadline set last year.

City investors and local authority pension funds that hold shares in M&S are demanding that the company appoint an independent chairman or a new chief executive by summer 2010.

The argument made when Rose became executive chairman last year - contravening best practice in corporate governance - was that in difficult times, he was by far the best man for the job.

In short, Rose is M&S - and in corporate branding terms, that has largely served the company well. Canvassing opinion at last week's Marketing Group of Great Britain dinner, I was struck by the support for the M&S boss among marketers. The consensus was that the stores are vastly improved; the Myleene Klass-led advertising campaign has instilled a new sense of style in the M&S brand; and the womenswear offering is light years ahead of the dire product available under Rose's predecessors.

Back in 2001, M&S attracted ridicule for its debut TV campaign, which featured a naked woman running up a hill shouting: 'I'm normal.'

Rose has taken a more pragmatic view of the M&S core customer. The 'Not just any ...' ads pushed the brand further upmarket, but have been dovetailed with tactical promotional work designed to emphasise value.

However, the City has not adopted the same rose-tinted view of the M&S turnaround as its boss. Witness the clash last week between Rose and Tony Shiret, a respected analyst at Credit Suisse, who said it was as 'clear as day' that M&S was losing market share.

Since Topshop owner Sir Philip Green walked away from a pounds 4-a-share takeover bid in the summer of 2004, the M&S share price has endured the same rollercoaster ride as most other FTSE 100 companies. Now, the shares are languishing in the region of 320p, well ahead of recent lows, but still down about 20% over the past year.

To be fair to Rose, he was saying long before most of his competitors that trading this year would be tough. In addition, it would be difficult to find a company boss who has not taken his foot off the accelerator on expansion-related capital expenditure. …

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