Not many Marks for the Rose Report

May 19, 2009

REUTERS– Neil Collins is a Reuters columnist. The views expressed are his own –

If a company’s health can be judged by the clarity of the statements it makes, Marks & Spencer is sick indeed. Its long, comprehensive and in parts incomprehensible statement with Tuesday’s figures is stuffed with jargon, phrases designed to cheer up the troops, while some key news is glossed over.

The dividend is not cut, but merely “rebased”, to provide “a stronger foundation for moving forward”. The group is “the only retailer not benefitting from food inflation”, which is one way of explaining away a margin squeeze.

The unexpected departure of Carl Leaver, considered one of M&S’s rising stars, is because “reverting to the key role of driving international does not fit his career aspirations.”

Ian Dyson, finance director and chief executive-presumptive, is invited to head a “change programme” under the banner “2020 – Doing the Right Thing”. If he doesn’t do the right things, he’ll be gone long before 2020.

An unspoken theme runs through the statement; all this frenetic activity conceals the lurking suspicion that Stuart Rose, now chairman as well as chief executive, doesn’t really know how to restore this company to its pre-eminent position in the hearts and purses of Britain’s shoppers.

We’re promised more M&S white goods, M&S Energy, M&S Direct, and a “re-invigorated brand communication”.

At the same time there will be expansion in China, India and Europe. It’s a lot to ask of the management of any business, let alone one which has lost ground and faces such formidable competitors.

Retailing is about making the customer feel good, and if the executives can convey an upbeat impression, perhaps it will filter through to the shop floor. Still, a little more contrition for the brutal 33 percent “rebasing” of the dividend (after raising it by 23 percent last year) might have lightened the gloom for the shareholders.


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