Marc Bolland will step down as the boss of Marks & Spencer in April, bringing an end to six difficult years at the British retailer following yet another poor Christmas trading.
The 132-year-old stalwart of Britain's shopping streets said on Thursday that Bolland had informed the board he would go in April and the firm has appointed Steve Rowe, the current head of its non-food business, as his successor.
Bolland had battled to bring M&S back to its glory days, spending billions of pounds on the redesign of products, stores, supply chain logistics and the website to address decades of under investment at the clothing business.
He had won some time by focusing on growing gross margins - the difference between the price M&S pays for goods and the price it sells them - rather than chasing unprofitable non-food sales.
But the weak trading over Christmas shows the group is still struggling to compete with the likes of Next, John Lewis and fashion chains such as Zara.
In the third quarter which covers the key Christmas trading period, like-for-like sales at the general merchandise division which covers clothes, shoes and homewares fell 5.8 percent.
The firm put the deterioration down to unusually warm weather which deterred people from buying warm clothing, and availability. It said it enjoyed its best ever Christmas in the food division.
"The Christmas trading figures from general merchandise have been talked about for a few weeks and there's been a lot of discounting evidence in the high streets, and Marks & Spencer hasn't discounted and that's why its sales are disappointing," Tony Shiret, senior food and retail analyst at Haitong Research, told CNBC Thursday.
"I have worked closely with Steve for six years and I am convinced that he will be a great leader for Marks & Spencer," Bolland said.
There have been "persistent rumors" that Bolland would leave, Shiret explains, adding that Rowe would be the "strongest" candidate to take on the chief executive role.
Rowe was previously in charge of M&S' food division, which performed well under his management. With Rowe now stepping into the CEO role, analysts are wondering whether M&S will start to focus more on food, and less on some of its merchandising units which is suffering from the switch to online shopping.
"(Marks and Spencer) has to consider whether they need as much space on the high street and over the next five years that will be the biggest issue facing them," said Shiret.
Responding to the latest announcement, John Ibbotson, director of the retail consultancy Retail Vision, said in a note that "after such a dismal Christmas, Marc Bolland has jumped before he was pushed."
"All the excuses in the world about unseasonably warm weather can't hide the fact that a 5.8 percent slide in like-for-like non-food sales is little short of dismal."
"M&S's clothing operation is now a fallen colossus. Years of long-term decline have seen it lose both its identity and market share, and the decision to sacrifice quality in order to cut costs has proved toxic for the brand's core middle-class customers – who have been deserting in droves," he added.
As such, Ibbotson warned that the incoming CEO faced a tough challenge.
"Steve Rowe now faces a far tougher challenge as CEO of what has become a truly schizophrenic empire. While the food operation's distinctive positioning means its prospects are good, M&S's clothing business has become a complete also-ran," he said.
"Solving the puzzle of a business with two divisions heading in opposite directions eluded his predecessor. And it's unlikely he will be given long to find a solution."
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