Bolland hands M&S baton to Steve Rowe: What the analysts say

“Bolland, a distinguished commercial statesman, has done a lot of very good work to fundamentally modernise and reposition M&S to be fit for the future in sustainably challenging markets.

“His successor from April, the excellent Steve Rowe, has a much stronger platform with which to take the business forward than Bolland inherited and we wish him well in that task.

“We like the fact that Rowe can possibly connect the great heritage of M&S, where he has worked for 25 years, to a modernised venture to take the future on with energy.

“We can foresee Steve Rowe bringing considerable energy to the M&S table.” – Clive Black, Shore Capital 

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“The news that Bolland will leave the company to be replaced as chief executive by Steve Rowe, currently managing director of general merchandise and until recently managing director of food, is more mixed news in our view.

“We believe that Bolland has done a good job in running M&S consistently along a modernising agenda during a very difficult period, during which the more short-term approach of the previous management had to be reversed and the industry has faced major structural changes on both sides of M&S’s operations.

“Regarding Rowe, our feeling is that no one knows M&S better than him and we have no concerns from an operational point of view. Relative to other internal candidates, this is probably the best out-turn and the record of bringing in external candidates in retail is mixed.

“Regarding Rowe, our feeling is that no one knows M&S better than him and we have no concerns from an operational point of view”

Tony Shiret, Haitong Research

“We consider him similar in overall qualities to Michael Sharp at Debenhams, being a known quantity operationally but unproven at the highest level. So there is risk in this appointment and we would expect that guidance from chief financial officer Helen Weir will be crucial for how the team in total delivers.

“At current levels of valuation we feel that there is very limited downside. We are happy to remain buyers and wish Bolland well having steadied and modernised the business.” – Tony Shiret, Haitong Research 

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”Today’s very poor general merchandise trading and downgrades will be overshadowed by the departure of Marc Bolland as chief executive and the promotion of Steve Rowe. Our wish is that Rowe brings in a revolutionary spirit - further evolution of the current strategy will lead to further weak sales and souring of the M&S brand.

”We would argue for a rethink on gross margin (lower prices or higher quality), an overhaul of merchandising, advertising and service, and an abandonment of the share buyback to invest in the real estate. If a change in strategy is attempted (and it’s a big if), short-term earnings will come under great pressure. But something dramatic is required to return M&S to its former glories and now there is at least the prospect of some change.” - Jonathan Pritchard, Peel Hunt 

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“With weak comparatives, the third quarter of 2016 was supposed to be the quarter when M&S finally demonstrated general merchandise was back on track. However, in keeping with others, the weather has spoilt the party, though self-help and a more flexible business model has limited the profit impact.

“Marc Bolland is retiring, to be replaced by Steve Rowe, an M&S ‘lifer’, who is known by the market and currently head of general merchandise. He has significant experience across the whole business having also run the food division and store operations historically and his appointment is likely to be well received in our view.” - Kate Calvert, Investec 

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“Some may say that Marc Bolland’s departure is overdue but there is no taking away from him the remarkable Christmas delivered by the food category.

“M&S food delivering a +5% like-for-like is testimony to its quality and in store excellence. Bolland’s successor, Steve Rowe, must now do what has eluded Bolland for so long and translate that winning formula into general merchandise.

“The trial announced to shift the mix of space in Marks and Spencer stores from fashion to food reflects the change in sales and will improve fashion sales density, assuming that the ranges are rationalised effectively. Could this finally be the start of a brand rationalisation too?” – James McGregor, Retail Remedy 

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“The good news is that food like-for-like sales were a little more than flat, up 0.4%, while there was no disappointment on the gross margin front. So there is no profit warning, thanks to M&S finding some cost savings to pluck out of thin air [a lot of which were volume related, however].

“But the main focus will be on the disastrous general merchandise sales and the unexpected but related departure of chief executive Marc Bolland.” – Nick Bubb, independent analyst