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Wednesday, February 24, 1999 Published at 12:06 GMT

Business: The Company File

Sparks at Marks

Marks and Spencer has been forced to make big cuts

Troubled retail giant Marks & Spencer has embarked on a management shake-out designed to improve the group's ailing fortunes.

M&S said that 31 of its 125 top executives were leaving the group, including three directors.

Newly appointed chief executive Peter Salsbury has stamped his authority on the group by orchestrating the boardroom clear-out.

The job cuts are expected to cost the company £10m.

Shopping shake-up

[ image: Shoppers have been deserting M&S]
Shoppers have been deserting M&S
The executive casualties will form part of the wider restructuring programme that could eventually see up to 200 senior managers and divisional directors leave the group.

The shake-up comes in the wake of a slump in profits which has caused turmoil at the Baker Street headquarters of one of the UK's largest retailer.

In the wake of the profit warning Sir Richard Greenbury decided to step down as chief executive. Then Keith Oates, the group's former deputy chairman, left M&S after a bitter battle with Mr Salsbury over who should succeed Sir Richard.


M&S is facing one of the biggest crises in its history. Intense competition in the High Street, dwindling demand and poor product lines caused earnings to slump.

However, the restructuring helped shares in the group rise 9p to 391p on the London Stock Exchange by 1100 GMT.

John Sacher, a director responsible for information technology, Chris Littmoden, who runs the company's US business and Derek Hayes, who is responsible for European operations, are retiring early from the group.

The departure of Mr Littmoden is particularly significant, given that there are rumours that M&S is planning to sell its US business, which includes Brook Brothers and Kings Super Markets.

The group plans to reduce the number of people on its board members from 23 to 16 within the next two years.

Job opportunities

However, the executives should have no problem finding a new job according to a leading recruitment firm. David Higgins, managing director of Harvey Nash, the UK's largest executive recruitment company, told BBC News Online: "M&S remains a top quality outfit...and there is still a demand for top quality managers."

Mr Higgins believes M&S became 'too entrenched' and lost out to more aggressive rivals such as Sainsbury and Tesco who introduced a host of new ready-meals and luxury food items.

"M&S caught a bit of a cold but that doesn't mean it should throw the baby out with the bathwater. It still has good management and should still have a successful future," he said.

Sir Richard Greenbury said: "I restructured the management when I took over in 1991 and the company then enjoyed seven years of strong growth. The changes announced today by our new chief executive, not only respond to a rapidly changing environment, but will enable us to be better focussed and thus move strongly forward again".

Peter Salsbury said: "Our business is going through a period of significant change. I would like to thank the individuals who are leaving for their hard work, loyalty and contribution to the company over many years."

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