I also thought that whilst many teams before had failed to act, even over identified issues, Archie Norman was a Chairman that could hold the CEO's feet to the fire and get the unpalatable done.
I also thought that M&S had so many problems that whilst overall change would take a 3+ year approach there was so much low hanging fruit to grab that we would see change in 6 months, and further improvement every 6 months thereafter. This was in my opinion a company ripe for a virtuous circle of improvement and many of those improvements whilst potentially small in themselves would be the significant steps to better things to come.
The M&S plan was based around 9 key strategies.
1-Reshaping the ranges and customer profile in Clothing and Home
2- Protecting the magic, but modernising food.
3 – Transforming our leadership
4- Building greater accountability
5- Becoming a digital first retailer
6-Creating a high end store estate for the future
7-Cost savings of £350m
8-Modernising the supply chains
9-Improve Profits in International
A 10th Strategy of Ocado seems to flit in or out as a separate strategy depending on the report. Also the Order of the Strategies seems to flex, possibly to try and push the better news further up the list, possibly because priorities change.
18 months ago I was disappointed to see from the numbers that little progress had really been made. Just as an example, my relatively small store carries 17 different types of black male socks. I can understand 6 (Top quality, Standard, Standard pattern 1, Standard pattern 2, Sports, Ankle) , but 17? No wonder they have too much stock and too little of what sells. They also have 5 different black mens umbrella (short or long will do). But I was prepared to accept that little changes were ongoing and we would see the results soon.
12 months ago I thought that maybe what we were seeing and management were saying that the nettle had perhaps been grasped. That whilst the figures were still dismal we could perhaps be seeing real positive change. Though my store still carried 17 different pairs of men's black socks and visits to larger stores (Hedge End, Camberley) showed poor layout and significant stock issues.
About 6 months ago the results were not good and I watched the analysts presentation. Again we start from the point that there are easy wins to be had, and many areas that M&S can just copy other operators to deliver a so much better business. No need to be good, just start being less awful. However the analysts presentation was not great imho. It reminded me of the saying that used to be about IBM. "When IBM wants a pint of milk it goes and buys a cow". Except that with M&S it was very much if M&S wants a pint of milk it will have a dam serious think about forming a sub group, empowering that sub group and conditionally pretexting that sub group into an area of consideration that may be bovine related.
This month M&S released its results. They were not good. Could have been worse I am sure and I was planning based on how bad they were to exit my position. Again I watched the Analysts presentation. I also listened to the Analysts questions. None of the analysts seemed overly interested in their questions or their answers. It seemed to me to be very much they have to do an update but they didn't think anyone would read it or anything new was being said. An area of quiet boredom perhaps best reflected the session I saw. Management were relying very much on yes the figures are bad, but October was better, change is behind schedule, but is coming. Even that seemed to be a bit equivocated towards the end of the meeting.
My position is now less than 1% of my portfolio as management have cratered the share price. But the long goodbye has significantly reduced my confidence in senior management (I am reminded of a Buffet saying; when a business with a poor reputation meets a management with a good one, it is the business that will leave with its reputation intact). I am however looking to hold on for the next set of results as I cannot see how management have made improving this business so difficult for themselves, when all they need to do is be a bit less awful than they have been in the past. Not even improve to the level of Next.
My local store still carries 17 different types of men's black socks.
I would not recommend this share to anyone and would sell if I had a requirement for the money. At current delivery it is not a positive alternative to cash imho.