Rose stays at the helm of a ‘streamlined’ M&S

Mar 11 2008 by Iain Laing, The Journal

MARKS & Spencer boss Sir Stuart Rose surprised the City yesterday by committing to stay with the retail giant until July 2011.

Sir Stuart pledged to remain with the group as he announced a sweeping management overhaul, which will see him move up from chief executive to become executive chairman. The move was described tactfully by one City analyst as “unusual”.

Lord Burns will stand down from his position as non-executive chairman amid the boardroom reshuffle, which will also see director of retail Guy Farrant leave after 30 years at the firm.

Sir Stuart, who earned £7.8m in salary and bonuses in 2006/07, will retire once he has completed his three-year spell as executive chairman, which is due to start in June.

He said: “M&S is a business with a strong heritage and great potential. This is an important time in its development. In taking on the role of executive chairman, my task will be to guide the business through the next stage of growth.”

Sir Stuart, who began his career at M&S, has been credited with reviving the chain since returning to the group as chief executive more than three years ago with more fashionable lines and ads featuring Twiggy and other celebrities.

M&S has recently been subject to speculation that Sir Stuart could be about to quit the group. He originally said on joining Marks & Spencer in 2004 that he would only stay with the firm for three years.

But the 58-year-old’s new role is likely to raise eyebrows in the City, with best practice guidelines on corporate governance recommending that a company should avoid promoting a chief executive to the role of chairman.

However, M&S said it believed Sir Stuart’s appointment was “in the best interests of M&S”, adding that it had also consulted with major shareholders.

The group declined to comment on how much he would be paid in his new role, ahead of details due to be revealed in the company’s annual report in June.

Securities analyst David Jeary said he would be a “tough act to follow” and this saved the board “a tricky decision”.

Lord Burns, who will leave M&S after more than two-and-a-half years, said Sir Stuart’s new position would allow him to focus on finding a successor.

He said: “Stuart has the unique skills to continue the challenge of making M&S a world-class retailer and to develop the future leaders of the business.”

The management overhaul sees a number of senior positions axed under plans to “streamline” the business.