Comment: Not sparkling, but Bolland deserves break

Terry Murden. Picture: Phil Wilkinson
Terry Murden. Picture: Phil Wilkinson
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BY ALL accounts the new clothing ranges at Marks & Spencer are attracting admiring glances, but, for reasons that are frustrating chief executive Marc Bolland, not enough customers are prepared to buy them.

The unseasonably warm autumn weather is partly to blame for the reluctance of shoppers to stock up with scarves and mittens, contributing to a ninth consecutive quarterly decline in non-food sales, although the higher temperatures have not been a problem for Primark which is now one of its biggest rivals.

The figures issued by M&S yesterday cover just one month of the new ranges so it is too soon to judge properly how sales will go. In its favour are indications that the rate of decline in womenswear has slowed and the ship may be turning. The shares rose on the announcement.

There is said to be a feeling around the company that someone wants to undermine it, that investors are expecting too much and that the continued pressure on Bolland is unwarranted in a climate that is markedly different to that experienced by many of his predecessors.

Apart from having to deal with the general squeeze on spending, the changing nature of retailing is impacting across the sector and store location in the click-and-collect era is now more important than ever before. M&S’s store at the Gyle, Edinburgh, for instance, is understood to be trading well above last year. In some cases, consumer choice comes down to simple factors such as a single floor layout, a full range of products, being able to park outside the door, or having somewhere nice to eat and drink.

Bolland has thrown everything at getting some momentum behind the changes he has made, spending millions in the process and trying fresh ideas to entice new and lapsed shoppers alike. So far he seems to be doing little more than treading water. Whether anyone else could do any better is a question for investors.

Investors on-message with Twitter flotation

TWITTER comes to market tomorrow in the year’s most-eagerly anticipated flotation and all bets point to it avoiding the problems that beset Facebook last year.

As with its rival, the price has been hiked in the days ahead of the flotation, though in Twitter’s case it appears to have undervalued itself in the first instance.

The price will be fixed tonight at close to $25 (£15.60) a share, which will boost the firm’s valuation to more than $17 billion. But it has yet to make a profit in the seven years since it was established and there is no prospect of it doing so for at least two years.

Private investors are being advised to watch from the sidelines in the early days to see how the price settles. Among the winners will be an army of advisers who are expected to earn big fees from the process. Goldman Sachs alone is in line for a $25m pay-day for its role as lead underwriter.