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Outlook: Now even Greenbury is subdued

Tuesday 03 November 1998 19:02 EST
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SIR RICHARD GREENBURY, the Marks & Spencer chairman, seemed a changed man yesterday. Perhaps the profits warning had taken its toll. Perhaps it was the valium he joked he had taken before the presentations. Or perhaps it was just his response to the growing clamour for clarification over the management succession which has been building over the past few weeks.

But there was no mistaking that instead of the "wounded rhino" that usually stalks the podium, we were given a glimpse of a different, statesmanlike Sir Richard. He even gave a higher profile to his fellow directors, who were allowed to answer more questions than usual.

Not that the leadership issue was advanced at all yesterday. What we got was a repeat of May's announcement that a review is under way but that no announcement is imminent. The main contenders, Peter Salsbury and Keith Oates, both looked comfortable enough, but they may have to wait a while yet before they get their hands on the prize.

Much of what has gone wrong at M&S is not Sir Richard's fault. It is unfortunate that he pressed the button on the company's biggest-ever expansion programme just as most of his major markets started heading south. And few faulted the logic of buying 19 stores from Littlewoods when the deal was done.

But there have been some buying mistakes and there is a growing feeling that M&S has become a bit too centralised, a bit too bureaucratic for its own good. Perhaps it is time for some gradual adjustments. What the City would like to see (sooner rather than later) is an announcement that Sir Richard will separate his chairman and chief executive roles. It is hard to see Sir Richard as a non-executive chairman, but a reasonable compromise might be for him to retain the executive chairmanship, with one of his managing directors elevated to the chief executive's position.

In the meantime the shares may weaken further as the bad news sinks in. But M&S remains Britain's biggest retailer, with a peerless portfolio of freehold sites and the best retail brand name in the country. If the shares dip much more it will certainly start to be seen as a buying opportunity.

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