case-study4 - CASE STUDY Marks and Spencer plc where next for the icon of British retailing Phyl Johnson and Nardine Collier In 2010 Marks and Spencer

case-study4 - CASE STUDY Marks and Spencer plc where next...

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CASE STUDY Marks and Spencer plc: where next for the icon of British retailing? Phyl Johnson and Nardine Collier In 2010, Marks and Spencer plc was the largest clothing retailer in the UK, it had 885 stores in 40 territories, 600 in the UK and boasted that one in three British women were wearing one of their Marks & Spencer bras. But still the ana- lysts worried about the sustainability of the giant of UK retailing’s recovery. In 2010 the new CEO took over and was faced with issues associated with reassessing the competitive strategy and the continuing challenges of strategic change. a71 a71 a71 retained something of the wounded giant about it. The company’s reputation had suffered great injury when, in 1998, it was the first British retailer to make profits of £1 billion and yet within the year it was issuing profit warn- ings. This was a catastrophic and self-inflicted crash from its premier position. The company limped through a period of turbulent change punctuated by aggressive takeover bids but then, with Sir Stuart’s appointment as CEO in 2004, finally saw its results regain health and return to the £1 billion profit level. In July 2009, Sir Stuart Rose, the man who saved Marks and Spencer plc, announced his intention to stand down as CEO in 2010. This triggered speculation and debate as to just what he had done as CEO; what he had done well, in what he had failed and what legacy he was leaving his In 2009, late into their 125th year of trading, the board of Marks and Spencer plc ended their search for a new CEO. The search had attracted a significant amount of media interest with many high profile names being suggested as potential external candidates as well as attention focused on at least two senior internal directors as the ultimate successor to Sir Stuart Rose: the man who turned around Marks and Spencer plc from near failure in the 1990s. The board chose 50-year-old Dutchman Marc Bolland, previously the CEO of UK supermarket chain Morrisons. His appointment, announced on 18 November 2009, was greeted with a positive response from the media and share- holders alike. Bolland, the successor to Sir Stuart, had ahead of him a significant challenge, to secure the future of the UK’s largest retailer and the most famous name in the shopping malls. Marks and Spencer plc had long been the leading retailer in the UK, the organisation to which all commentators and analysts turn to when reporting whether the high street is having a good or bad season of sales and an organisation that was historically known and loved by the British people. But at the end of 2009 and early into 2010 com- mentators remained restless, investors nervous and there were several question marks about the future of this firm that needed to be resolved. In 2009, despite delivering reasonable results through the 2008/09 recession period and in the previous year having topped the £1 billion 1 marker in pre-tax profits for the first time in a decade, Marks and Spencer plc still 1 £1 billion x 1.1 billion or $1.5 billion as at 1 June 2010.

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