Sorry to disturb your meeting, Mr Holmes, it's a call from Sir Rex Tyrannosaur
Sir Rocco Forte got the call on his way to go shooting. Derek Wanless got his on the way to the airport. He was heading for the International Monetary Fund's meeting in Washington, but, of course, he never made it. This is the call that takes precedence and strikes terror. A demure voice announces that Sir Rex Tyrannosaur is on the line, and then the earpiece crackles: 'Morning! I just wanted to let you know, as a matter of courtesy, that we're bidding for your company in half an hour.' Click. To Roger Holmes, the call came in Marks & Spencer's Baker Street offices, half way through one of his meetings. Philip Green wanted him to know that a bid would be on its way this week. Well, thanks, Sir Rex. Mr Holmes must have known — Mr Green certainly knew — that this call had caught M&S with its slow-selling trousers down and its lace-trimmed knickers in a twist. Luc Vandevelde. its chairman, had turned out to be an absentee landlord. Mr Holmes, the chief executive, had admitted that M&S's recovery was faltering. That word has now come back to haunt him. Mr Wanless was chief executive of the National Westminster Bank until the bids came and his boardroom colleagues threw him to the sharks. He swam to the Treasury and has now made a second career, writing reports on the National Health Service to confirm Gordon Brown in his belief that all is well. With his McKinsey background, Mr Holmes might now find that this suited him, for his board's response to the call has been to push him overboard.
Marksmanship
The directors of M&S needed a scapegoat, and Mr Holmes had to do. They are, in fact, much the same board that chose him to be chief executive, two years ago. Now they are scrambling to put their company into a state of defence. They must realise that Philip Green, even if he cannot expect to stroll in, has kicked the door wide open. The vanishing Mr Vandevelde, who on £1,730,000 a year has been fifth in the list of Britain's most highly paid chairmen, is an ornament they can no longer afford. They are or were supposed to be going through the stately minuet which, under today's rules for corporate correctness, is designed to culminate in the arrival of a chairman almost as expensive as his predecessor, and as disengaged.
Time has run out on them, though. This factious board has had to pick one of its own, and Paul Myners comes closest to filling the part of a leader who can take the war into the enemy's camp. Guardian Media Group (he is chairman there, too) may have to look after itself for a while.
Grow your own
The natural first line of M&S's defence has been to go into the transfer market and hire a star retailer as chief executive. Stuart Rose once lived in Arcadia, prospered there mightily, sold out to Mr Green, collected £25 million as he passed Go, and now has surely been able to command his own terms. A seven-figure cheque by way of a signingon fee is only the start of it. In M&S's heyday, it grew its own retailers, and Mr Green himself named three of them: Simon Marks, Marcus Sieff and Rick Greenbury. That must have gone down the wrong way in Baker Street, where Sir Rick was declared an unperson by a successor who took all their portraits down from the walls. They were, indeed, retailers of the old school, steeped in the brand and the business, unerringly able (as I was saying a few weeks ago) to spot the only substandard cauliflower in the store, unwilling to let go. Simon Marks died in the office, infuriated beyond bearing by a substandard shirt. That was commitment.
Make haste slowly
The world has moved on around M&S, as the old regime was, in the end, slow to realise, and a retailer of the new school must find new ways of rebuilding its fortunes. It took time and commitment to build them, as the old hands would have testified, and a quick fix will not do it. Unfortunately, today's big investors are rather keen on quick fixes. They like to think that they are becoming more active, their patience soon snaps, they demand change at the top, the chief executive slinks away with a sackful of money, and the headhunters find a new wonder-worker and write him a contract packed full of incentives. He fixes the things that can quickly be fixed and brings in the results that trigger off his bonuses. (Strange how the two so often seem to coincide.) The business's deep-seated ailments then prove fatal to him — today's chief executive has a lifespan not much longer that a mayfly's, or Mr Holmes's — and the process starts again. M&S and its builders deserve better than that.
Quantities of sand
I have never been to Athabasca or surveyed its fabulous tar sands — they are better suited, I should think. to Ozyrnandias or the Walrus and the Carpenter — but I expect to hear more of them. When the price of oil takes off, they come back into favour. They are said to contain oil in almost unlimited quantities, but the price has to climb above $40 a barrel and stay there before it becomes economic to exploit them. This week the market was moving their way, with its traditional sources suddenly looking less stable than Athabasca, and hoarders and speculators coming in for their share of the blame. My own observation suggests that since oil is valued in dollars, its price tends to take off when there are a lot of them about. That was true in the 1970s, when the world sustained its two great oil shocks, and it is truer than ever today. On that view, the market will peak when the dollar supply tightens up — or, perhaps, when we start to hear talk of the tar sands.
Refer to drawer
I voted for Nicholas Luard when he stood for Parliament as a Chelsea Nationalist. He was Private Eye's Lord Gnome II and a man ahead of his time. His one-man party would have found a place on the ballot papers in next week's bizarre elections, and might have swept London and enlivened Strasbourg, but death has precluded him. His publishers ought to honour his memory by reissuing Refer To Drawer, his masterly account of how to raise the wind by sailing close to it. From this work I like to quote Luard's Law, so often forgotten by lenders: Credit is only the Latin word for 'he believes it'.
Previous page
