Marks & Spencer Group PLC (MKS.LN) Wednesday ended months of speculation by appointing Marc Bolland as its new chief executive, poaching him from supermarket group William Morrison Supermarkets PLC (MRW.LN).

Bolland will take the reins from M&S executive chairman Stuart Rose in the new year, and Rose will remain as part-time chairman to ensure a smooth transition. Rose has always maintained he will leave the company by July 2011.

Bolland, 50, will join M&S after three years at the helm of Morrison, the U.K.'s fourth-largest supermarket chain. He steered a turnaround plan that has improved margins, revamped stores, and helped the group return to profit following years of poor trading after the integration of supermarket chain Safeway, which Morrison acquired in March 2004.

The switch affected the companies' shares. At 1400 GMT, M&S shares were up 6.49%, or 24p, to 392p, the biggest rise on the FTSE 100, while Morrison's shares were down 4.77% or 14p at 281p, the biggest decline on the index.

Bolland's credentials in the food and beverage retailing industry will be a welcome boon for M&S, which has a reputation for quality but is also perceived as expensive and has quickly lost market share to lower-priced rivals during the economic downturn.

Rose had turned M&S around before the downturn, cutting costs, revamping stores and introducing more fashionable clothing ranges that produced higher profits and sales. However, the company, the U.K.'s largest department store operator, has seen sales and profits decline again as the U.K. recession took hold and has been forced to launch value ranges, revamp its website and improve its retail channels to claw back market share lost to supermarkets.

While Bolland has plenty of experience in the food and drinks sector--he was previously chief operating officer and executive board member at Dutch brewer Heineken NV (HEIA.AE), having held several senior roles at the company over the previous 20 years--he is lacking experience in selling general merchandise and clothes.

Analysts at Sanford Bernstein said Bolland faces a number of new challenges, particularly in non-food, although the broker welcomed the appointment of an outside candidate for the job.

While Morrison focused on selling groceries, M&S is facing growing competition online as well as from supermarket giants like Tesco PLC (TSCO.LN) and J Sainsbury PLC (SBRY.LN) which are expanding and promoting their own general merchandise ranges.

Bolland's appointment will be a relief to investors who had criticized Stuart Rose's dual role as executive chairman and chief executive at M&S, believing he was wielding too much power at the company.

Since Rose's appointment to the dual role in June 2008, several names have been linked with the CEO position, including Andy Bond of Wal-Mart Stores Inc. (WMT)-owned Asda Group Ltd, and Justin King of Sainsbury. Bond and King had previously ruled themselves out of the running for the job.

There were also internal possibilities, including finance director Ian Dyson, and the heads of the two main divisions--executive director of food John Dixon and general merchandise chief Kate Bostock--all of whom presented at the recent analyst day.

"We were concerned that an internal CEO promotion would very much translate in 'more of the same' as far as the strategic direction for M&S is concerned," Bernstein said in a note to clients Wednesday.

Bolland will remain at Morrison until the end of the financial year on Feb, 1 2010. The company said Wednesday it has started the process of finding a successor and will review both internal and external candidates.

For Morrisons the appointment is a near-term blow but Bernstein believes that the improvement in the core food business which Bolland has effected leaves a new CEO able to consider alternative growth options like non-food, online retailing, loyalty cards and international expansion.

-By Kathy Sandler, Dow Jones Newswires; 44-207-842-9293; kathy.sandler@dowjones.com
Heineken (EU:HEIO)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024 Click aqui para mais gráficos Heineken.
Heineken (EU:HEIO)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024 Click aqui para mais gráficos Heineken.