Can Archie Norman fix M&S?

The troubled retailer has named a famed troubleshooter as its new chairman. Critics say he has plenty of work to do. Ben Judge report


M&S: fashion is still the heart of the business

The troubled retailer has named a famed troubleshooter as its new chairman. Critics say he has plenty of work to do. Ben Judge reports.

Marks & Spencer reported a rare rise in clothing sales over Christmas, but the retailer is still struggling against stiff competition from cheaper or more fashionable rivals such as Primark, Zara and H&M. Repeated efforts to turn things around have failed as sales decline. The latest attempt to shore things up came in the shape of two new faces appointed to the firm last week. Jill McDonald has parachuted in from car-parts retailer Halfords to the newly created post of "managing director, clothing, home and beauty". McDonald has no previous fashion retail experience before taking up her role at Halfords in 2015, she worked for restaurant chain McDonald's.

Investors' enthusiam for her arrival was muted, but there was acclaim for new chairman Archie Norman, a retail veteran who made his name as chief executive of Asda. Norman has "made a career of marching confidently into once-swaggering British institutions after they have been reduced to a stumbling despair", says Mark Vandevelde in the Financial Times. His "reputation for unleashing growth in businesses where others see only faded glory" triggered a "surge of optimism", driving the shares up by over 5% on the news of his appointment.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Indeed, Norman is "an inspired choice", says Jeremy Warner in The Daily Telegraph. It's a "lucky break" for the one-time doyen of the high street. "Frankly, I'm amazed that he was persuaded to do the job." M&S remains "under siege on all sides from the online behemoths" and has been "drifting sideways" since Robert Swannell, the "completely ineffectual" outgoing chairman, got there in 2011. But then, Norman is "always up for a challenge". Hopefully, he can galvanise Steve Rowe, M&S's "faintly underwhelming" chief executive, into the radical thinking that retailing requires these days.

Steady on, says Alex Brummer in the Daily Mail. Investors are so relieved that a retailer is taking over from the investment banker that Norman's appointment "has been hailed as a second coming". But remember that "several previous, and failed, incumbents" also had a retail background, including former chairman Luc Vandervelde and chief executive Roger Holmes, a "protg" of Norman at Kingfisher. The problem with most M&S appointments is that they have backgrounds "far removed from women's clothing and fashion which are at the core of M&S". Norman may be "a brilliant grocer and DIY expert, but he is not Amancio Ortega, the genius behind Zara".

Why you should still "like" Facebook

Social network Facebook published its first-quarter results last week, at a time when it's facing criticism for hosting fake news, gruesome videos, and targeted ads.The figures showed that this "gigantic advertising machine" has "continued to fire on all cylinders", says Mathew Ingram on Fortune. Net income rose to $3.06bn, up from $1.74bn for the same period the previous year, while revenue rose from $5.38bn to $8.03bn. Monthly active users rose by 18% to 1.94 billion.

Despite the good news, the shares dipped by 2%, after chief financial officer Dave Wehner said "he expected advertising revenue growth to come down meaningfully' in the second half", says Annah Kuchler in the Financial Times. In the longer term, "plans to host longer videos on Facebook would hit margins", as Facebook will have to share revenue with content producers.

Still, nothing in the results "merits getting stressed out about", says Leila Abboud on Bloomberg Gadfly. Growth at photosharing app Instagram should take up some of the slack, while focusing on video will help to draw some of the money advertisers now spend on television."As Facebook nears the five-year anniversary of its initial public offering, it's worth reflecting on how far it's come." In 2012, it was the world's tenth-biggest seller of ads; now it's the second, behind only Google. "Even a slower-growing Facebook will be a money-spinning juggernaut for a long while."

City talk

"Fruit, flowers and candles" is a "well-known accounting euphemism for the two other costly indulgences that traditionally accompany rock'n'roll", says Matthew Vincent in the Financial Times something that was never queried by record company auditors. A similar reluctance to ask awkward questions seems to have afflicted auditors at Rolls-Royce, Tesco and Autonomy, where three of the most recent UK accounting scandals occurred.

Common to all three is the companies' "long-lauded leaderships" 15 years at Rolls-Royce, 14 years at Tesco and 15 years at Autonomy. Perhaps auditors "find it harder to challenge companies with very longstanding and revered chief executives".

Just a few weeks ago Imagination Technologies was a thriving business making chips for iPhones. Then, Apple decided it would make its own chips and Imagination's share price fell by over 60%. Imagination wants to know how Apple proposes to do that without infringing its intellectual property, says Alistair Osborne in The Times, and has opened up a dispute resolution procedure. But it's "hardly a fair fight".

"Imagination suspects Apple plans to wear it down, possibly via the courts, before offering to buy its tech on the cheap", making a mockery of Apple's claim to "protect the rights of all the people in our supply chain".

John Lewis has been forced to set aside £36m after becoming the latest big retailer to fall foul of minimum wage rules. However, the partnership "hasn't technically paid people below minimum wage", according to Oscar Williams-Grut on Business Insider. Instead, the problem is a "mathematical breach". In a statement, the company said that its practice of pay averaging, which "aims to smooth out a partner's pay over a year", may not meet the "specific criteria of what are some quite complex regulations".

Ben Judge

Ben studied modern languages at London University's Queen Mary College. After dabbling unhappily in local government finance for a while, he went to work for The Scotsman newspaper in Edinburgh. The launch of the paper's website,, in the early years of the dotcom craze, saw Ben move online to manage the Business and Motors channels before becoming deputy editor with responsibility for all aspects of online production for The Scotsman, Scotland on Sunday and the Edinburgh Evening News websites, along with the papers' Edinburgh Festivals website.

Ben joined MoneyWeek as website editor in 2008, just as the Great Financial Crisis was brewing. He has written extensively for the website and magazine, with a particular emphasis on alternative finance and fintech, including blockchain and bitcoin. As an early adopter of bitcoin, Ben bought when the price was under $200, but went on to spend it all on foolish fripperies.