M&S: Vandevelde quits with job half done
Marks & Spencer out of the doldrums, has parted company with
the group four years after taking over as chairman. But as he
leaves, there are signs that all his good work is rapidly being
undone, leaving the group in an even more precarious position than
when he arrived.
Vandevelde's departure was not a surprise, with the M&S chairman playing an increasingly 'hands off' role at the company, not least because of his directiorial commitments elsewhere. In particular, he had been spending an increasingly large amount of time involved with Carrefour, the French hypermarket giant where he is a non-executive board member, following the accidental death last year of Paul-Louis Halley.
The Halley holding is the largest in Carrefour, and a personal commitment made by Vandevelde to the family means that he is now effectively managing these assets on their behalf.
But the Carrefour situation was simply the straw that broke the camel's back, and Vandevelde's commitment to M&S appeared to have been waning for some time, and certainly since he relinquished his dual role as chairman and chief executive in September 2002 with the appointment of Roger Holmes as chief executive.
Just four months later, Vandevelde founded Change Capital Partners, a private equity fund that targets retail companies across western Europe, and this, combined with a another non-executive post, at mobile phone giant Vodafone, meant that M&S was becoming less of a priority.
The search has now begun for a new chairman, with opinion apparently divided between whether to concentrate on a retail specialist (such as former Asda chief Archie Norman) or someone with a broader entrepreneurial background, leaving the retail management to the experienced Holmes.
Whoever takes over, he will be inheriting a group once again in need of a shot in the arm, with perennially poor results from the clothing arm recently spreading to the food division, for a long time the only part of the business performing in line with expectations.
If anything, this situation is somewhat worse than that which Vandevelde inherited when he first took the reins in 2000, but this would suggest (incorrectly) that the outgoing chairman did nothing to improve the lot of the company. Indeed, his arrival at M&S marked something of a purple patch for the troubled retailer, whose somewhat old fashioned image had led to dwindling clothing sales.
Under Vandevelde's leadership, the company revamped its clothing range with the help of designer George Davies (the man behind Asda's successful clothing range), withdrew from almost all of its foreign operations and launched the highly successful Simply Food business. By mid-2002, Vandevelde declared that the company had turned the corner, a claim substantiated by the sharp rise in value of the firm's shares.
But as if this declaration was the kiss of death, the latter part of 2002 saw the company begin another slow decline, losing momentum once again in the clothing division and, most recently, and most worryingly, seeing the rot spread to the once untouchable food business as well - an indication that without Vandevelde at the helm, the company was incapable of finding its way or merely a natural consequence of the short-term recovery measures he introduced?
Perhaps a bit of both, at least according to Bryan Roberts, analyst at M+M Planet Retail.
"Luc Vandevelde's impact on M&S has undoubtedly been a positive one in overall terms," he told FoodandDrinkEurope.com. "He has stabilised what was a flailing, directionless business and has strengthened areas such as food and clothing while divesting non-core activities to streamline the company.
"The introduction of ranges such as Per Una and the rollout of the highly impressive Simply Food format are both laudable initiatives that augur well for the future and Vandevelde has also done much to strip away the layers of bureaucracy that had made M&S something of a slow-moving dinosaur in what has become a rapidly changing and fickle UK retail sector."
But his increasingly 'hands-off' approach was his ultimate downfall. "However, it became clear this year that directors and shareholders were becoming increasingly impatient with Vandevelde, and it is fair to say that his other commitments meant that, in simple terms, the business was not receiving value for money from him," Roberts suggested.
"Perhaps the appointment of a chairman with more time to offer and decent retail experience could enable M&S to shake off recent disappointments and prove that the 'recovery' kick-started by Luc Vandevelde is a genuine, sustainable turnaround rather than a masterclass in papering over the cracks."
Many M&S shareholders are hopeful that the board will now appoint a candidate of this calibre to help complete the business transformation which Vandevelde began. Competing on three different fronts - food, clothing and furniture - M&S has struggled to hold its position in any of them, and whoever the new chairman is will have to work hard to restore the company's position (and its credibility) in all these areas - or risk the growing possibility of a takeover.
