The new chief executive of Marks & Spencer, Steve Rowe, has signalled he is prepared to make changes to the way the retailer is run by retaining personal control of the troubled clothing division.
Rowe, who took the helm on Saturday, will retain oversight of the general merchandising division he had been running before his promotion to chief executive of the overall group. M&S has two divisions: general merchanising (GM) – the bulk of which is clothing – and food.
Rowe spent his first Saturday as boss in the Croydon store where he first worked aged 15. On his first day in the office on Monday he told staff he regarded the GM division as the retailer’s number one priority.
He also told staff he intended to focus more tightly on customers and make the business less complicated. “I’m a big believer in keeping things simple. Doing things simply means we serve customers better, manage costs, and work more efficiently,” Rowe said in a memo to staff.
“I wholeheartedly believe in the growth of this business. We need to work together and work smarter in order to do it, but I know that it’s achievable and that we can achieve it in a profitable way for our shareholders,” said Rowe.
He has taken over just as M&S prepares to announce a trading update on Thursday that analysts expect to show a fall of more than 3% in like-for-like GM sales in the fourth quarter. The food arm is expected to produce underlying sales growth of about 0.3% in the 13 weeks to 26 March.
“I’m going to carry on looking after general merchandise,” Rowe told Reuters. “The [GM] business unit directors will continue to report to me for the foreseeable future because that’s where I believe the priority is ... We need to get GM working.”
An M&S spokesperson confirmed that Rowe had told the team he would lead the division “for the foreseeable future”. The spokesperson said: “He sees GM as the number one priority for M&S and is personally committed to getting it right. As a result, all the GM business unit directors will continue to report to Steve as they work together to move the business forward.”
The move could also signal a streamlining of the boardroom as the head of the GM division has traditionally had a seat at the board. Analysts at stockbroker Peel Hunt marked the beginning of Rowe’s tenure by upgrading their recommendation on the stock from hold to buy. “Thankfully we believe that new CEO Steve Rowe brings with him an appetite for change,” the analysts said. “As CEO, we expect him to shake up a number of internal processes and make M&S a sharper place in general, but most importantly, we believe he will take action on the things that really matter: product, pricing, service, merchandising and, in the round, getting closer to the customer,” the analysts said.
They noted that like-for-like sales in the GM division had risen in only one quarter in the previous 16.
Rowe was formerly head of food at the retailer and was moved to take charge of the clothing and homeware division last summer. He was promoted to chief executive to replace Marc Bolland, who announced in January he would leave in April after doing the “heavy lifting”.
Rowe, 48, has spent most of his career at M&S. After a stint working Saturdays in the Croydon branch, he joined Topshop as a trainee when he left school at 18, before rejoining M&S four years later.
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