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REUTERS SUMMIT-M&S boss says stock problems fixed, feels relaxed
September 13, 2012 / 8:20 PM / 5 years ago

REUTERS SUMMIT-M&S boss says stock problems fixed, feels relaxed

* CEO says womenswear stock levels “where we want them”

* Says new clothing team need time to make impact

* Says M&S not on bid footing

* Says major investors back strategy

By James Davey and Neil Maidment

LONDON, Sept 13 (Reuters) - Marks & Spencer has fixed the stock management problems that hit womenswear sales in the last six months, its CEO said, adding he did not feel under pressure from investors despite renewed talk of a possible bid for the British retailer.

In July Britain’s largest clothing retailer M&S shook up its general merchandise management team after posting its biggest quarterly sales drop for 3-1/2 years, blaming wet summer weather and stock management issues that left its stores short of best selling lines.

“It was not good enough; we took the adequate steps,” Chief Executive Marc Bolland said at the Reuters Retail and Consumer Summit on Thursday.

“Stock levels are back up where we want them. ... We’ve also changed the buying processes for it.”

John Dixon, previously in charge of food, has replaced Kate Bostock as the boss of clothing, while Belinda Earl, former CEO of Debenhams, Jaeger as well as Aquascutum, has been brought in as style director.

“I think that they (Dixon and Earl) need some time and shareholders are aware that normally you would have sort of six months lead time before you can change. Spring/summer next year will show some of the new buys,” said Bolland, sporting a so-called M&S sustainable suit made from organic, recycled and reclaimed materials, at the summit held at the Reuters office in London.

Some analysts reckon July’s disappointing update from M&S, which followed one in May when the firm slashed its sales growth forecast, have made the bellwether UK retailer increasingly vulnerable to a bid.

Shares in the 128-year-old company that sells clothes, footwear and homewares as well as upmarket foods from about 730 stores to 21 million Britons a week, have risen 15 percent over the last three months, buoyed by persistent speculation regarding a possible offer from private equity or a sovereign wealth fund.

Bolland said reports of possible bids were “rumours and speculation; we cannot comment on any rumours or speculation.”

Asked if M&S was preparing for a possible takeover bid, he said no and said its major investors fully backed his strategy of focusing on the UK, embracing multi-channel retailing and selective overseas expansion.

“The board has a very clear strategy, is behind the strategy. Major shareholders are in behind the strategy,” he said. “I‘m relaxed.”

Bolland said M&S’ customer research had shown a “strong uptick” in consumer confidence over the Olympic and Paralympic Games period.

But he noted: “The translation of immediate customer confidence into ‘I am going to spend more’ is not what the industry data and the data that we are tracking have suggested.”

Separately on Thursday, clothing retailer Next and department store and food group John Lewis, two of Britain’s best performing retailers, warned of a slowdown in an already troubled sector, dampening hopes that consumers might help return the recession hit economy to growth.

Shares in M&S closed down 1.3 percent at 370 pence, valuing the business at about 5.96 billion pounds.

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