LISA BUCKINGHAM: Bolland's bank is just another desperate idea
20:21 GMT, 9 June 2012
It’s hard not to feel positively giddy at the see-sawing of our iconic High Street retailer Marks & Spencer.
For those of us with a longish memory, it seems only yesterday that former chief executive Sir Stuart Rose decided to sell the company’s half share in its financial services business to joint venture partner HSBC, declaring it needed to focus on its core retailing business. He also pulled back from overseas stores to concentrate on the UK market.
But now, as it emerges that the company has actually lost market share in its crucial womenswear business, the highly remunerated new chief executive Marc Bolland appears set on reversing just about everything his predecessor did.
Lisa Buckingham: M&S customers are well-heeled and sensible, theyll begrudge paying for a bank account
Certainly the M&S brand is
trusted and our bank industry does need fresh competition. But is
Bolland’s idea of opening bank branches in M&S stores really going
to do anything much – for either bank customers or M&S profits
This business will still be HSBC-run,
so it is unlikely that an M&S mortgage or current account is going
to be much different from that already offered by the banking giant.
And although M&S, through its
HSBC partnership, already offers credit cards and is the second-biggest
holiday money provider after the Post Office, this business generates a
meagre 50million a year.
M&S customers tend to be older
and better-heeled than the average, so many will have paid off their
mortgage and be sensible bank account holders who stay in credit,
thereby enjoying free banking. They are likely to begrudge paying for
new-style accounts that charge a fee.
There is a sense of desperation about
Bolland’s latest move. He has launched a joint-venture Conran homeware
operation, is rebuilding abroad, beauty ranges are cropping up and there
was the laughable Marcel Wanders range that made major stores look like
Middle Eastern bazaars last Christmas.
The truth is that M&S still lives
by the strength of its womenswear. This could be unsettled further if,
as is widely rumoured, Kate Bostock, the long-standing head of this
division, departs in summer.
Halfway through his turnround plans
and with his sales targets in tatters, Bolland looks lost. The only
thing still intact, it seems, is his overall pay packet.
From the embers of its reign as
supreme City watchdog, the Financial Services Authority has finally
woken up to the dangers its zealous oversight of boardroom appointments
Possibly it needed the unedifying
spectacle of Paul Manduca naming himself as replacement to outgoing
Prudential chairman Harvey McGrath after he led the search (and failed)
to find someone suitable from outside for the scrutiny committee at
Canary Wharf to face the reality of the noose it has been placing around
the City’s neck.
Numerous company bosses have
complained that they cannot attract people they want into non-executive
roles because of the ferocity of the FSA’s interrogation procedures. A
number of banks and insurers have told me their attempts to improve
boardroom diversity have been stymied because even the most senior
women are unwilling to subject themselves to such intense
In the aftermath of the banking
crisis, clearly regulators cannot afford to let standards slip, but it
is just as plain that they cannot impose a straitjacket that tends to
throw up the same old white, male and stale candidates, unless they want
to be accused of perpetuating ‘group think’.
I have been a strong critic of the
FSA’s myopic shutting-the-stable-door appointments process, which has
meant practically no one outside existing financial services circles has
been allowed to join a board.
If those on the current
merry-go-round were so marvellous how come we had the first run on a
bank since 1866 at Northern Rock and now have two major lenders largely
in State control
It is thoroughly welcome that
interviews will usually be held for chairmen and heads of the audit
committee only. Let’s hope this means boardrooms will be allowed to
breathe and people willing to ask difficult, unpleasant and
left-of-field questions will be allowed in.
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