M&S gets new boss

Marks and Spencer's leadership duo has to consolidate the recovery

UK retailer Marks & Spencer has promoted Roger Holmes to chief executive as part of a management reshuffle designed to put the finishing touches to its recovery.

Roger Holmes, who is managing director of M&S' UK retail operations, will take over from Luc Vandevelde, the man credited with restoring the firm's fortunes after it lost its touch for mid-market fashion.

Mr Vandevelde staked his reputation on turning M&S around, promising to resign if the company failed to turn the corner by May 2002 - a pledge many City analysts thought at one time he would have to keep.

Mr Vandevelde will revert to his original role as chairman and work part-time from 1 January next year.

'Looking ahead'

M&S' latest sales figures showed its recovery was continuing.

Marks and Spencer has revitalised its fashion range...

It posted a 9.1% jump in overall UK sales for the 14 weeks to 6 July 2002 and a 14.8% rise in clothing and footwear sales.

The retailer said its turnaround was complete and the management reshuffle was designed to take it forward.

"We have completed the re-structuring of the company, we are pursuing a clear strategy and with this announcement we are putting in place the right leadership structure," the retailer said.

Mr Vandevelde said the retailer's performance over the past quarter "demonstrates we are securing the recovery".

"This is the second consecutive quarter where we have increased market share in clothing, reflecting the continuing progress we are making in improving the appeal of our clothing and the store environment."

Speaking on BBC television, he said M&S was now "outperforming" the market at a time when market conditions were "extremely buoyant".

Concerns remain

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Mr Vandevelde's time as chief executive was marked by controversy over his pay package.

A row over an £816,000 bonus, due to be paid out while the retailer was still struggling, led to Mr Vandevelde waiving the money.

However, the retailer posted a 30% rise in profits and a year later Mr Vandevelde received a £1.358m bonus, including most of the money he had waived.

Food sales rose 2.9% in the period to 6 July, showing the firm had "maintained share in a very competitive market," said M&S.

Some retail analysts still have doubts about the strength of M&S' recovery.

They warn the company may find it hard to retain its sales growth if higher interest rates and higher taxes lead to weaker consumer spending in the UK.