When Tesco Plc was in crisis, many investors wanted Archie Norman to become its chairman. Instead, he's ended up at another storied but struggling British household name: Marks and Spencer Plc.
M&S isn't in as much of a pickle as Tesco was, but it is striving to revive its clothing business while the consumer environment is about to get tougher as inflation bites.
Norman's appointment should help. He brings plenty of boardroom savvy, having chaired Asda and broadcaster ITV Plc, where he was part of a team that engineered a turnaround.
Steve Rowe, who became M&S chief executive a year ago, is a proper retailer, having started on the shop floor of a store in the south of London. But he's spent less time cultivating the City. Norman would address that, as shown by an almost 6 percent jump in the company's shares after his appointment was announced.
Room At The Top
Still, it's not just external stakeholders that Norman needs to handle. He'll also have to referee the top executives at the company. And that just got harder. The top of M&S is looking increasingly crowded.
Earlier this week, it appointed Jill McDonald, the chief executive of British car parts retailer Halfords Group Plc, to head its non-food business. Putting aside the fact that McDonald has no clothing experience, she's clearly ambitious, having led a FTSE 250 company. There's also Helen Weir, finance director, who previously held senior roles at Kingfisher and Lloyds Banking Group.
While that makes for a strong top team, any slip-ups from Rowe could see a resurfacing of the tensions that plagued M&S boardrooms under past chief executives. That seems far off for now. M&S reported its best clothing sales for five years over the crucial Christmas period. Yet two of Rowe's recent moves bear scrutiny.
The first is the testing of online food delivery, something that's difficult to pull off profitably. The second is renewing a contract with Mark and Neal Lindsey, the supply chain experts drafted in by former CEO Marc Bolland. Their presence should help M&S deal with the impact of sterling's slump on overseas sourcing. But they must do so while making sure not to jeopardize Rowe's pledge to improve quality. This is essential if he wants to entice "Mrs M&S" back to the store.
A strong chairman should be able to control the boardroom dynamics, avoiding the damaging tensions of the past. The danger is that his job morphs from managing the board to managing the business.
So Norman will need to navigate the tricky path between proper oversight and being overbearing. M&S wants shoppers fighting over the choicest morsels. It would rather its directors didn't do the same.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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