Relations between Marks & Spencer and the City are likely to thaw following the appointment of Robert Swannell to succeed Sir Stuart Rose as chairman of the bellwether retailer.
Swannell’s arrival - he joins M&S’s board in October and becomes chairman in January 2011 - will finally draw to a close hostilities that erupted in 2008 when Rose controversially combined the roles of chairman and chief executive.
Rose - whose departure next year will end almost seven years at the helm of M&S after he was parachuted in to defend it against a hostile bid from Arcadia tycoon Sir Philip Green - sought to draw a line under the long-running dispute when he confirmed Swannell’s arrival. Rose said: “His appointment completes our succession plan and enables us to revert to standard governance practice.”
Former banker Swannell, who also intends to remain chairman of entertainment retailer HMV, has some experience of M&S. He worked with Rose on his defence of M&S against Green in 2004.
Seymour Pierce analyst Kate Calvert said: “He’s very experienced. Not only does he know M&S well but he’s got significant corporate and City experience that will help relationships with the City.”
She welcomed a return to standard governance. “We’ve now got someone at the top who is more independent and can keep an eye on the executive team. People will feel more comfortable with that.”
Swannell’s appointment completes M&S’s controlling triumvirate, following the arrival of former Morrisons boss Marc Bolland as chief executive in May and recruitment of former WHSmith man Alan Stewart as finance director.
Bolland is expected to outline his strategy for M&S this autumn. Calvert said there is now “an interesting new skillset” at the top of M&S and that the three should complement each other well. “The key now is to look at the rest of the organisation,” she said.
Singer analyst Matthew McEachran paid tribute to Rose but admitted: “Perhaps the board will be a bit more consistent. Stuart Rose brought great energy at very pertinent moments - he’s a merchant - but there may have been times when he should have been a bit less hyperactive.”
He observed that none of the new triumvirate has any experience in clothing. “That needn’t be a problem on the basis that the team below them is very strong,” he maintained.
Swannell spent 30 years at Schroders and Citigroup rising to vice-chairmanship roles. He then focused on non-executive positions but will give up his directorships of property firm British Land and private equity group 3i when he joins M&S.
He said: “It is a privilege to be asked to chair one of the world’s greatest brands.”
M&S’s shares rose 3.9p to 336.6p following the announcement of Swannell’s appointment.
He joins M&S at a time when, despite the governance spats, the retailer has been outperforming rivals in clothing and gaining ground in food. In July, Rose reported first-quarter like-for-like growth of 6% in general merchandise and 1.5% in food.
On Tuesday, broker UBS reiterated its buy advice on Marks & Spencer. Analyst Andy Hughes said latest food market share data showed that M&S had achieved a sixth successive month of gains on a 12-week rolling basis and that accelerated product development seems to be paying dividends. He said that the latest ONS sales data also implied that M&S continues to perform strongly.
Pay as M&S chairman £450,000 a year
Education Rugby School
Qualifications Chartered accountant, barrister
2009 Appointed chairman of HMV
2006 Became vice-chairman of Citigroup Europe
2004 Worked on the defence of Marks & Spencer
2000 Schroders bought by Citigroup
1977 Joined Schroders, rising to become vice-chairman of investment banking