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Monday, April 19, 1999 Published at 18:38 GMT 19:38 UK

Business: The Company File

Springtime for M&S

Marks and Spencer has to sharpen up its act

It's a tough world out there on the UK's High Streets for Marks & Spencer and as the BBC's Greg Wood reports the new chief executive Peter Salisbury must prove soon that he is the right man for the job.

Spring is in the air and British retailers Marks and Spencer will be hoping it really is a season of renewal after an exceptionally bitter winter.

The company seems to have fallen from grace recently. Its fashion items, if not its food, have not been selling in the spectacular way they used to.

Then it suffered a titanic boardroom struggle, which ended with the appointment in January of a new chief executive Peter Salisbury, after several senior departures, and a disastrous fall in profits.

New broom

A lifelong company employee, he was the anointed successor to Sir Richard Greenbury, the man who had ruled Marks & Spencer for the past ten years. Since then he's wielded the axe, cutting hundreds of management jobs at head office. And it isn't over yet.

"I think that a company that has done well year after and year can often believe it has a winning formula that doesn't need changing and events such as the streamlining programme we are undertaking carry with them some pain," said Mr Salisbury.

"But the key objective is very clear: if we are to be competitively responsive to our customer needs we have to be able to take decisions in a timely and efficient way. There is no end to this and no real start point," he added.

Fashion victim

But job cuts are not enough. Marks and Spencer has still to address what many see as its worst failing - a sudden decline in the quality and style of its womenswear.

It has just launched its summer range of womens' clothing with the emphasis on every shade of blue combined with white, and what the company calls spicy and citrus colours.

This range, more than anything else, will determine the company's chances of a revival in sales. It has also listened to customer demands for more sales assistants in the shops.

Almost two thousand extra staff are being put on the shop floor in the run up to the busy May Day Bank holiday. But the company knows there is still plenty of room for improvement in catering for the varied customer demands.

"We have to make it easier for the classic customer to find the item they want and also for the fashion customer to spot the item which is this season's must have. We haven't done a good enough job in clarifying those choices," said James Benfield, the company's new marketing director.

Big test

The May Bank holiday weekend will be the first big test for Peter Salisbury and his management team. It is nonetheless a prospect he says he relishes.

"I've got the best job in retail. This is an absolutely tremendous opportunity for me. But no one is saying it is easy."

It is also a fantastic risk. Shareholders will not give Mr Salisbury much time to turn Marks and Spencer round.

If he fails to re-establish it as Britain's favourite shop he risks the same fate as his former boardroom colleagues.

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