Makeover 
impact still 
awaited as 
M&S profits set to fall

Weaker clothes sales led to an executive makeover last year at the Leeds-born retail giant, with John Dixon brought from the M&S Food division as head of general merchandise and former Debenhams and Jaeger boss Belinda Earl appointed style director.

The reshuffle hit a snag when “Knicker Queen” Janie Schaffer, hired to shake up the firm’s underwear division, walked out as director of lingerie and beauty after just three months. She was replaced by Next’s Jo Jenkins.

Marc Bolland, who took over as chief executive at M&S in 2010, has said the impact of the changes would not be felt until after this year’s spring and summer lines, put together by the previous regime – making the launch of the autumn range a few days ago a key test.

Earl’s emphasis on “quality, stylish fashions” and “looking upwards for aspirations” – with styles ranging from punk and fake fur to 40s inspired dresses and a leopard print pencil skirt – impressed some in the City, but other observers believe M&S has a long way to go.

Analysts expect profits will fall by nearly seven per cent from £705.9m to £658m when the retailer unveils full-year profits for 2012/13. Estimates at the start of the financial year had been for a figure of around £710m.

According to the Financial Times, Mr Bolland will miss out on much of his bonus for the third year in a row, as around 60 per cent of the pay-out is based on targets related to profits.

He was paid a salary of £975,000 last year although he could still receive a bonus of almost £2m when the annual report is released later this summer, the FT report added.

Strong food sales will offset the falls in general merchandise, leading to a sales increase of up to 1.3 per cent in the full-year results. M&S said last year it was planning for £825m in capital expenditure, up from £738m in the year to 2012.

While optimists think the revamped clothing range and the recent opening of a new distribution centre are important steps in the right direction, they think even more investment than expected will need to be poured in before any turnaround is achieved.

M&S recently launched an extended store at the new Trinity Leeds shopping centre in the city.