July 11, 2019 / 9:21 AM / 2 months ago

UPDATE 3-M&S CEO sacks clothing boss, assumes direct control of division

* Clothing head Jill McDonald sacked

* Group CEO Steve Rowe to lead clothing division directly

* McDonald, previously at Halfords, joined M&S in 2017

* CEO highlighted continuing availability issues at AGM

* M&S shares down 30% over last year (Adds detail, shares)

LONDON, July 11 (Reuters) - The chief executive of Marks & Spencer is to assume direct leadership of the British retailer’s troubled clothing business after sacking the division’s boss just two days after publicly criticising chronic product availability.

Jill McDonald, clothing, home & beauty managing director, is leaving the business after less than two years in the job, M&S said on Thursday. Group CEO Steve Rowe will take over the leadership of the division directly in the near term, it added.

“The business now needs to move on at pace to address long-standing issues in our clothing and home supply chain around availability and flow of product,” said Rowe.

“Given the importance of this task to M&S I will be overseeing this programme directly.”

Rowe did praise McDonald for strengthening the clothing management team, improving the quality and style of products and setting a clear direction for the business to attract a younger family age customer.

But product availability remains a major problem for M&S, something Rowe highlighted at Tuesday’s annual shareholders’ meeting.

He said a February promotion for jeans badly backfired when M&S failed to buy enough stock and sold out. “That led to us having some of the worst availability in casual trousers I’ve seen in my life,” said Rowe.

McDonald joined M&S in October 2017 to take on one of the biggest jobs in British fashion, having previously been the chief executive of bicycles and car parts company Halfords . Her appointment raised questions from some because she had no clothing retail experience.

After several failed relaunches over the past decade, the jury is out on whether the 135-year-old M&S can rise to the challenges posed by fast-fashion chains such as Zara and H&M in its clothing business.

M&S set out its latest turnaround plan shortly after retail veteran Archie Norman became chairman in September 2017 to work alongside Rowe, who became CEO in 2016 and has been with the company three decades.

In May M&S reported a third straight drop in annual profit in the 2018-19 year, with clothing and home like-for-like sales down 1.6%. Its shares are down 30% from a year ago.

McDonald was a Rowe hire. On appointment he highlighted her “fantastic customer insight” and a wealth of operational, retail and leadership experience developed at Halfords and fast-food giant McDonald’s.

NOTABLE BY OMISSION

At Tuesday’s annual meeting Rowe said it had been a “troubled year” for the clothing and home business.

He said M&S had developed a strong team in clothing, name checking 2018 hires Jill Stanton, women’s and kid’s director, and Wes Taylor, the menswear director for bringing over 60 years clothing experience to the business.

However, McDonald’s name was notable by omission from Rowe’s speech.

“I think here we’ve done much of the hard work on style and fit and it’s the process that we need to change,” Rowe said.

“Further work (is needed) on getting size ratios correct, making sure we reduce the number of lines we’re running so we can buy deeper, concentrating on the big lines that we’re famous for across the UK,” he said.

Rowe forecast an improvement by the autumn.

Industry publication Drapers reported in June that Topshop fashion director Maddy Evans was leaving the company to join M&S in a senior buying role. M&S declined to comment on that report.

As McDonald is not a main board director M&S will not be releasing severance payment details. (Reporting by James Davey Editing by Deepa Babington, Keith Weir/Emelia Sithole-Matarise)

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