M&S Boss Marc Bolland To Step Down This Year

Marks & Spencer (Other OTC: MAKSF - news) 's boss Marc Bolland is to step down this year, the retailer has said.

The announcement came as the retailer revealed dismal Christmas trading figures, with like-for-like sales at its general merchandise (GM (NYSE: GM - news) ) division, which includes clothing, down 5.8% - partly blamed on warmer than usual weather.

Mr Bolland - who previously ran supermarket Morrisons - has led M&S since 2010. He has come under sustained pressure over poor fashion sales while trying to address the decline with management shake-ups and high-profile celebrity ad campaigns. He has also spent billions on product redesigns, stores, supply chain logistics and the website.

The chief executive will be succeeded by GM boss Steve Rowe in April (LSE: 0N69.L - news) and remain with the company until the end of June to assist with the transition.

Mr Rowe, a veteran with more than 25 years at M&S, led the retailer's food division to 12 successive quarters of growth before being moved to GM in July to try to turn around its performance. As the new chief executive, he will receive a basic salary of £810,000 - lower than Mr Bolland's - and the same bonus terms as the current boss.

Mr Bolland will continue to receive his salary, pension and other benefits until next January and remain eligible for a potential bonus for the current financial year - but not for 2016/17.

He received a total remuneration package worth £2.1m in the 2014/15 financial year including a basic salary of £975,000 plus benefits and bonuses.

In a trading update published at the same time as the announcement about Mr Bolland, M&S said that it had "faced challenging trading conditions" over the Christmas quarter.

It (Other OTC: ITGL - news) pointed to unseasonal weather which weighed on the whole clothing sector and drove heavy promotions. Rival Next has also blamed the higher-than-usual temperatures for its disappointing festive sales.

Marks said it held back from discounting and this had hit its sales performance though profit margins were protected. M&S also said it "fell short on availability" in the division.

"We acknowledge there is more to do to address the disappointing GM sales, and the new team are focused on the three key priorities of availability, ranging and design."

The poor figures for general merchandise in the trading period covering the 13 weeks to 26 December masked another improvement for Marks's food division, which it said enjoyed its best ever Christmas.

Like-for-like sales rose 0.4% in a grocery sector where many retailers are experiencing decline amid a fierce price war - including Waitrose, which targets a similar upmarket clientele.

Meanwhile the retailer's loyalty members club, Sparks, has seen 3.3 million customers join since its launch 11 weeks ago.

Marks & Spencer's website saw strong growth, up 20.9%. The company said its international business faced a tough economic environment, particularly in the Middle East though there was a strong performance in other areas such as India.

Mr Bolland said: "M&S had an excellent Christmas in food, delivering record Christmas sales and strongly outperforming the market. General merchandise sales were disappointing."

M&S said Mr Bolland had informed the board that he wished to retire in 2016.

He said it had been "a huge honour to lead one of Britain's most iconic companies", adding: "I have worked closely with Steve for six years and I am convinced that he will be a great leader for Marks & Spencer."

Chairman Robert Swannell said the chief executive had "led Marks & Spencer through a period of necessary change" with investment in infrastructure and its own online platform meaning it was "now positioned for a digital age".

He said new boss Mr Rowe "has a deep knowledge of Marks & Spencer and a proven track record of delivering results in key parts of the business (Other OTC: UBGXF - news) ".