Rowe to exit M&S with jump in profit, but much still to do

div classBodysc17zpet90 cdBBJodivpBy James Daveyp

pLONDON Reuters – Steve Rowe will next week step down as chief executive of British retailer Marks & Spencer after a turbulent six years in the top job, with his internal successor set for a baptism of fire amid a worsening costofliving crisis.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pRowe, who joined M&S at the age of 15 before rising through the ranks, will end a 39year career at the clothing and food group after presenting annual results on Wednesday that are expected to show a jump in profit.p

pAlong with chairman Archie Norman, Rowe has sought to transform the 138year old M&S with a radical overhaul of its store estate, a renewed focus on the quality and value of its clothing and food, and heavy investment in technology and ecommerce, including a joint venture with Ocado that belatedly took M&S food online.p

pHaving steered M&S through the COVID19 pandemic, he exits with hopes raised that one of Britains most elusive turnarounds could finally materialise after two decades of false dawns.p

pBut he also departs with M&Ss share price at well below half the level it was when he became CEO in 2016 and with UK consumers facing the biggest squeeze on disposable income since at least the 1950s.p

pRowe will be succeeded by food boss and joint chief operating officer Stuart Machin, who will become chief executive and take on responsibility for daytoday leadership of the business and its executive committee.p

pAn unconventional structure will see him backed up by Katie Bickerstaffe, currently M&Ss other chief operating officer, who will become cochief executive, and finance and strategy chief Eoin Tonge.p

pMachin‘s first task will be to navigate Britain’s costofliving crunch.p

p“While the typical clothing & home M&S customer is less exposed to mortgages, they will no doubt be feeling the pinch, while the food business is at risk of shoppers trading down over the coming months,” said Santander analyst Rebecca McClellan.p

pWith M&S having already flagged headwinds it is facing in the 202223 year, including labour, energy, fuel and logistics inflation, analysts expect a cautious outlook statement.p

pLast month, rivals Tesco and Sainsburys both warned of lower profit this year. p

pNorman said this week that Britons were still spending despite inflation hitting a 40year high. Official data also showed an unexpected jump in April sales.p

p“The crunch is going to be in the autumn when people come back from their holidays, they‘ve spent their money and there’s nothing left in the kitty,” Norman told BBC radio.p

pFor the year to April 2, M&S is expected to report profit before tax and adjusting items of 522 million pounds 651 million, according to analysts average forecast. It made just 41.6 million pounds in the pandemic hit 202021 year.p

pTotal clothing and home UK sales are seen up 46.6 on 202021 and up 0.5 on 201920, while food sales are seen up 10.3 on 202021 and 9.7 on 201920.p

pNo dividend is expected.p

p1 0.8018 poundsp

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pp Reporting by James Davey Editing by Mark Potterp

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