BUZZ-UK retailers: the allure of external CEOs

** UK retailers' stocks tend to perform well 6-30 months after the arrival of an external CEO, Morgan Stanley (Xetra: 885836 - news) (MS) writes, singling out M&S for significant outperformance potential following management rejig on Wednesday

** Brokerage's thesis, based on analysis of 10 instances of FTSE 350 retailers hiring external heads since May 2008, causes it to back M&S; MS repeated "overweight" after M&S on Wed named new clothing head and freed up CEO Steve Rowe to head overall co

** Rowe, whilst an M&S veteran who led clothing unit's first quarterly sales increase in c.2 yrs, has a mandate for change which makes him similar to external appointees, per MS

** MS also supports Debenhams (Frankfurt: D2T.F - news) , citing new CEO's strategy update (60p TP, but broker deems too risky for "overweight" rating), but repeats "underweight" Morrisons (TP 170p), saying operational improvements likely to be short-lived

** DEB said last month to return to growth by closing some stores & flagged higher capex and costs to streamline, whereas MRW on Thurs beats forecasts & reports 6th consecutive quarter of underlying sales growth

** DEB nursing losses YTD, underperforming both MKS & MRW, which are in positive territory