A relief for new Marks & Spencer CEO Marc Bolland: like-for-like sales rose for the third consecutive quarter, with food up 1.5% (thanks to the introduction of new lines) and everything else up 6% (somewhat improbably, the endorsement of the England football team has actually boosted clothing sales). It’s not all good news, though: the overall rise of 3.6% for the 13 weeks to July 3 is down from 5.1% in the previous quarter. And with a VAT rise slated for the beginning of next year, Bolland has warned that the Government may be leading retailers out of the frying pan and into the fire...
Bolland only started the job on May 1, so he hasn’t had much of a chance to make an impact on the company yet - suggesting that these results reflect a general upward trend for the retailer. But it's a solid start, and he's clearly beginning to make his presence felt (notably with a new monthly survey of consumer confidence, to help gauge overall sentiment). And he's been busy running the rule over his new company: he said today that he'll produce a full outline of his plans for M&S in November.
M&S went through a distinctly shaky period during the recession, as posh food suddenly dropped down people’s priority lists. And Bolland warned the company’s fledgling recovery might be short-lived once the VAT rise kicks in. The flying Dutchman said he’s ‘cautious’ about how the 2.5% rise will hit consumer spending; although the retailer is ‘not jumping to any conclusions only a couple of weeks after the Budget’, he’s concerned confidence will drop off. M&S is generally seen as something of a bellwether for British retail – so this kind of warning is likely to make people sit up and take notice.
Bolland may have had some nice numbers to report at his first quarterly results, but in the grand tradition of M&S CEOs, he still has some controversy hanging over him. Some investors are up in arms about his £15m golden hello – one corporate governance advisory body, Pirc, has even advised shareholders to vote against it at the company’s AGM next week. At £975,000, Bolland’s basic salary is 77 times the average pay of M&S employees, while the £7.5m compensation Bolland gets for ‘lost bonuses and shares’ he would have received at his old job at Morrisons is... well, a lot more again.
Oh go on then, we’ll say it: this is not just a salary; it's an M&S CEO salary...
In today's bulletin:
Nursing job cuts highlight major problem with 'efficiency savings'
Bolland off to a flier as M&S sales rise 3.6%
BP looks East - as US Government demands further concessions
£35m a year for the Business Link website? Really??
Helping businesses walk the walk on CSR