This is not just any appointment…it’s one of the biggest jobs in British retail! Steve Rowe has taken over from Marc Bolland as the Chief Executive of Marks & Spencer. Rowe, who has spent 25 years at M&S, said he intends to “put the customer at the heart of the business” and will take a particularly hands on approach by overseeing general merchandise for the foreseeable future. M&S have experienced falling sales in clothing over the last 3 years, and with the clothing bosses now reporting directly to Rowe, he has signaled how important this category is to him and the importance of improving its sales.
In 2010, M&S were bringing in annual revenues of £4.1bn; however, this had fallen to £4bn by 2015. Rowe needs to understand the chain’s shoppers and reconnect with its middle-aged and increasingly disenfranchised female shoppers. Whilst value for money is key to M&S customers, their ‘value’ range has been rivaled by the likes of Debenhams and Next, who offer a similar style range at a cheaper price. This lack of competitiveness within the market has caused M&S’s UK clothing share to decrease from 11% in 2010, to now just 9.9%.
However, Bolland’s legacy does have some areas of promise for Rowe to inherit. The M&S food range has experienced 25 consecutive quarters of like-for-like sales growth, which Rowe ran for 3 years, and the Simply Food chain has outsold discounters Aldi and Lidl as its own-label brand. M&S now has over 852 UK stores, and with Rowe’s focus on the structure and the sales of general merchandise, M&S may also need to alter their store strategy. With the increase in click and collect orders at Simply Food stores, RBC’s Chamberlain believes the retailer should accelerate ‘the pace of high-street store closures’ and convert ‘space from general merchandise to food’.