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M&S axes 31 top executives
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February 24, 1999: 7:51 a.m. ET
U.K. retailer culls senior staff; likely to sell Brooks Brothers unit
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LONDON (CNNfn) - Leading clothing retailer Marks & Spencer culled almost a quarter of its top executives, including three board directors, and looks set to sell its U.S. subsidiary, upscale clothing retailer Brooks Brothers.
Analysts are betting that M&S's new chief executive, Peter Salsbury, is preparing to sell the upscale clothing retailer after ousting Chris Littmoden, the head of the company's U.S. business.
"It is inevitable that the market will conclude that whatever M&S said today Brooks Brothers is going to be disposed off," said William Cullum, European retail analyst at Paribas.
An M&S spokesman wouldn't comment specifically on plans for Brooks or the company's U.S. supermarket chain, Kings Super Markets, which could also go. "These two businesses are profitable year-on-year and are not businesses we are particularly worried about, but no part of M&S is sacrosanct," he said.
Littmoden loses his job along with the director for Europe, Derek Hayes, and the I.T. head, John Sacher. A further 28 divisional managers are also out.
M&S (MKS) will take an exceptional $16 million charge to cover the cost of the lay-offs. The write-off also includes the pay-off for former deputy chairman Keith Oates, who left the company last year after losing out in a boardroom battle for the top job.
More management job cuts are likely as Salsbury continues his strategic review, which is expected to last another five months. "They need more people on the floor serving customers and less people at head office who cost a lot more than shop staff," said Cullum.
The company spokesman said he "could not rule out further redundancies."
The job cuts received a warm welcome from investors, who are looking to Salsbury to repair the damaged reputation of a company that was long regarded as the benchmark for retailers in Europe.
M&S shares were up 2.75 percent in London at 393 pence.
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Marks & Spencer
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