Marks and Marks (and Marcs)

Next week is going to be all about Marks & Spencer, with Marc Bolland starting work at Paddington on Tuesday.

Last night M&S held a party to launch its new Summer food range by the rooftop pool at the uber-trendy Shoreditch House. It was a very nice event, mostly for consumer journos (who must live an amazing life) although a lot of the analyst community were there too, and I can confirm that the food was delicious. A lot of the products seem to include the word Ultimate (eg Ultimate Burger, Ultimate Bun etc), and M&S can only hope the necessary ‘Barbeque Summer’ arrives this year so that it can sell lots of them

I didn’t see any of the senior management while I was there, and I’ll save my comments on Bolland for Tuesday. There’ll be acres of coverage over the weekend, and I want to focus on a different Marks right now, Peter of Co-op fame, who appears on the front page of this week’s Retail Week today because of our scoop on the plummeting sales at the ex-Somerfield stores it bought last year.

It’s fair to say that the Co-op didn’t want us to write the story, but because we had documentary evidence of the slump in sales we had them bang to rights and in the end they sent us a statement saying that the fall was planned for various reasons, including that they’ve lowered prices across the chain.

That has to be nonsense - the documents we have show that both sales and profilt are running ell below budget - and perhaps the most telling statistic is that in the core-Co-op chain (ie those which weren’t bought from Somerfield) sales have actually been rising. No-one buys a business for £1.5bn and spends a fortune converting the stores with the aim of like for likes falling 14%. That sort of figure even puts Morrisons’ woes after the Safeway deal in the shade.

But the comparison is a worthwhile one. Like Sir Ken, Marks is known for having a personal style which is often described as direct, and has been quick to switch everything to the Co-op way of doing things since the deal, with very few senior people from Somerfield remaining. Yet although the Co-op has made real strides in its business in recent years, there was much to admire about how Somerfield was run in the latter days of its private equity ownership, and they were also very different businesses where rushing integration was always going to be risky.

Now this is out in the open, Marks is going to have his work cut out to justify the deal and - given that the Co-op was the only buyer in town - that it didn’t overpay. According to the whispers we’ve heard, Co-op HQ in Manchester isn’t a happy place at the moment, and I suspect our story today might just be the start of a longer tale.