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LONDON (Reuters) - Marc Bolland will step down as the boss of retailer Marks & Spencer (MKS.L) in April, bringing an end to a turbulent tenure in which he modernised the 132-year-old British institution but failed to bring its clothing back into fashion.
Bolland, who has been chief executive for six years, will be succeeded by company veteran Steve Rowe in arguably the most prestigious - and high-profile - job in British retail.
For generations, children went to school in M&S clothes, teenagers turned to it for their first work interview suits and shoppers of all ages bought its underwear.
But the advent over the last 20 years of fast, cheap fashion at one end of the market and affordable luxury at the other - combined with fierce online competition - has left M&S struggling to return to its glory days.
Londoner Rowe, 48, faces the task of finding the formula that eluded Bolland at M&S; he must lure shoppers back to its clothes, dispelling its outdated image of recent years, and seek to match the success enjoyed by its upmarket food business.
Bolland spent billions of pounds on the redesign of products, stores, supply chain logistics and the website to address decades of underinvestment but failed to deliver a sustained rise in clothing sales to accompany the profit margin gains he did achieve.
The 56-year-old Dutchman announced his departure after yet another poor Christmas showing for the firm's general merchandise division - of clothing, shoes and homeware - that saw sales slump.
The division accounts for around two-thirds of group profit, so its success or failure is likely to determine Rowe's own fortune as CEO of a company where he has worked for more than half his life.
Bolland said he had informed Chairman Robert Swannell last summer he wanted to retire in 2016 if a suitable candidate as successor could be found.
"Right from the outset I saw my tenure as a five to six years term," he said, noting that when added to his time leading grocer Morrisons (MRW.L) he had spent a decade in the UK.
Swannell said Bolland had not been under any pressure to leave, from either the board or shareholders, and one investor told Reuters he had not expected his exit so swiftly.
"(The news was) quite a surprise, although it is not uncommon for CEOs to move on after that kind of tenure," said Richard Marwood, senior investment manager at AXA Investment Managers, one of the company’s top 40 shareholders.
"Having somebody already in the business succeeding him is probably no bad thing. I don't think we are looking for a change of direction. Investors are still waiting for the Bolland plan of a more cash generative, well invested and internet enabled business to be fully delivered," he added.
Swannell said other internal candidates, as well as external ones, were considered but that Rowe had been the stand-out figure. "He has a deep knowledge of the business, he knows it inside out."
Rowe, a Millwall football club, golf and scuba diving fan, has made no secret of his desire for the top job, telling Reuters in 2014 he would love to be boss of "the best retailer probably in the world".
As an 18-year-old he started out at fashion chain Topshop and his 26-year M&S career has included stints in menswear, homeware, beauty and e-commerce. He has served under eight M&S chairmen and six CEOs.
He was named head of M&S food in 2012, and delivered 12 straight quarters of underlying sales growth and an outperformance of the wider industry, before becoming head of problematic general merchandise last July.
Analysts said Bolland had put M&S on a stronger footing - with the food business taking market share and online sales improving - giving Rowe a stronger platform than Bolland had when he took over from Stuart Rose in 2010.
Shares in M&S rose 19 percent under Bolland's tenure, outperforming the 6.5 percent gain recorded by the overall FTSE 100 blue chip index, but way behind the 213 percent gain delivered by rival Next (NXT.L).
M&S shares were down 1.2 percent at 433 pence at 1351 GMT on Thursday.
Bolland had improved the company's financials by focussing on growing gross margins - the difference between the price M&S pays for goods and the price it sells them - which had helped it to deliver a first profit rise in four years, a higher dividend and a share buyback programme.
But weak clothing trading in the run-up to Christmas for the second year in a row shows the group is still struggling to properly compete with British rivals such as Next and John Lewis [JLP.UL] and fashion chains including Zara and Reiss.
In the third quarter, which includes the Christmas trading period, like-for-like sales at the general merchandise division fell 5.8 percent. It said unusually warm weather that deterred people from buying winter clothing was partly to blame - a factor also cited by Next for its poor Christmas - but also admitted to poor availability of some items.
M&S did, however, nudge up its margin guidance for the division, reflecting a decision to hold back on discounting products.
By contrast, M&S said its food business enjoyed its best ever Christmas. Like-for-like sales were 0.4 percent, a 25th straight quarterly rise.
Additional reporting by Sinead Cruise; Editing by Keith Weir and Pravin Char