Sir Stuart Rose delivered his final results statement as Marks and Spencer boss today and he bowed out with some good news: profits jumped 4.6% to £632.5m in the year to 27 March. Admittedly its lacklustre sales growth (like-for-likes were up an underwhelming 0.9%) suggests that things won't be easy for new boss Marc Bolland. But M&S's position now looks a lot healthier than it did when Sir Stuart took the reins...
It's been a tough couple of years for M&S, which suffered more than most from customers trading down in the recession – both in clothing and food. But things seem to be back on track, at least to some extent: profits were (just) ahead of forecasts, while total sales were up 3.2% to £9.3bn. Food sales are finally growing again, while it also claims to have boosted market share in clothing. Internet sales are up, international sales are up, costs are down, and there's an £81m bonus pot for employees. Y-fronts and Percy Pigs all round, then.
But can M&S ever get back to the glory days of the Rose years when annual profits topped £1bn? Not everyone's convinced: broker Investec suggested 'radical measures' are still required to improve the retailer's supply chain, property portfolio, online service and balance sheet. The food business has extremely strong competition, both from the supermarkets and the booming Waitrose. And there's clearly still work to do in updating stores and improving its clothing ranges; while ex-Morrisons chief Bolland has an impressive track record in food, he has little or no experience in clothing.
That said, Bolland's task is arguably easier than that facing Rose when he took the top job in 2004. He spent his first year fending off hostile takeover bids from Philip Green amid a background of falling sales, waning profits, and boardroom strife – yet by 2007 he'd almost doubled the share price and boosted profits above the £1bn mark, earning himself a string of leadership plaudits (not to mention a knighthood) on the way. And although things haven't gone as well since, he's at least managed to steer the company through the worst and recruit Bolland before moving upstairs. During his time at the helm he's succeeded in making M&S relevant and raising its aspirations again – and for that its staff, shareholders and supporters should be grateful.
In today's bulletin
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