Shares in Marks & Spencer came under pressure yesterday as the City reacted to news that the head of its embattled clothing division had quit after nearly three decades at the group.
M&S confirmed in a statement that John Dixon was leaving “this great company” after being given the chance to become chief executive at another business.
Dixon had been seen as a potential successor to current M&S chief executive Marc Bolland, who has been in charge since 2010. Dixon is stepping down from the board with immediate effect and will leave the company at a date to be agreed.
His responsibilities will be taken over by Steve Rowe, who had previously succeeded him as head of the food division.
Andy Adcock, currently trading director, food, is to step up to be director of food, reporting to Bolland on an interim basis.
Dixon said: “I have thoroughly enjoyed many happy and successful years at M&S.
“I now have the opportunity to become a chief executive and have therefore resigned from this great company. I wish it, and all my colleagues, every continued success.”
Dixon has been with the high street stalwart for more than 26 years, starting his career as a store manager, and undertaking a successful spell in charge of its food division from 2008 before taking over general merchandise in October 2012.
The division, which includes clothing and homewares, has continued to struggle, with a setback in the most recent quarter as like-for-like sales fell. In the previous three-month period they had risen for the first time after 14 successive periods of decline.
M&S also faced well-publicised criticism over its clothing range from one of its own former designers at its annual general meeting recently.
Retailing analyst and consultant Nick Bubb said yesterday: “It is unclear what CEO role [Dixon] has landed elsewhere, with Asda playing down the chances of him replacing the beleaguered Andy Clarke.
“It is a shame that John is leaving, but it looks as if he was moving down the internal pecking order at M&S, having been given the thankless task of running M&S clothing.
“It remains to be seen how far the current M&S food boss Steve Rowe, the internal favourite to replace Marc Bolland as CEO in due course, will be handicapped by taking on John’s difficult job… and how fast the star is rising of the new M&S food boss, one Andy Adcock.”
Analysts at Jefferies noted: “This is a blow to M&S but with Steve Rowe stepping into Dixon’s shoes, we believe the M&S recovery can continue relatively unscathed.”
Shares in M&S closed down 6.5p at 539.5p, having touched a low of 538p earlier in the session.
In May, the City gave a guarded welcome to the group’s first rise in annual profit in four years but remained wary about calling a definitive turnaround at one of Britain’s bellwether retailers.
Underlying pre-profits rose 6 per cent to £661.2 million for the year to 28 March, ahead of analysts’ expectations.
The firm also announced a £150m share buyback, the first time it has returned cash to shareholders this way since 2008.
One analyst said M&S was now taking “considerable strides” towards the days when its earnings once topped £1 billion. However, others urged caution on the state of the rebound.
Phil Dorrell, of the Retail Remedy consultancy, commented: “One strong season does not a turnaround make. But at least it is an indication that M&S’s core business has stopped misfiring at last. Bolland still has a mountain to climb.”