Interview: Marks & Spencer chief executive Stuart Machin

There are many serious business questions to ask Stuart Machin, the CEO of Marks & Spencer. As the man responsible for restoring the fortunes of the UK’s best-loved retailer, a heavy responsibility rests on the country’s shoppers and its army of petty shareholders.

But before we get into that, I want to know more about Joan Collins. He is friends with Dame Joan, a fact that came to the fore when she was hit by a masked cyclist on her way to dinner with Machin, actor Christopher Biggins and several other friends at Rules restaurant in Covent Garden.

He says, ‘She’s an icon… and she’s so proudly British. I like her whole style.’

The actress, he says, is a “big fan” of M&S and regularly visits her local store when she’s in the UK. She sends WhatsApps with pictures of her cart and writes that ‘she keeps me going’. He calls her “an absolute star and legend.”

Machin, who has just finished his first year as CEO, is one of M&S’s top clients. He is the company’s third largest buyer of menswear. The identities of the top two remain a mystery.

More importantly, millions of regular customers are buying more.

The city loved Machin’s first set of annual results. Pre-tax profits rose by more than a fifth to £476 million, food sales were up almost 9 per cent and there was an 11.5 per cent increase in sales of clothing and home goods.

Machin is a strong supporter of the Mail’s ‘Abolish the tourist tax’ campaign. “Tourists would come here knowing they could shop VAT free, not just in London but all over the UK. We are constantly asked about it by tourists in our Marble Arch store.’

Speaking of which, he has no remorse to critics of his plan to redevelop the flagship store. Leveling Up secretary Michael Gove put forward the proposal to demolish and rebuild the store, known as ‘The Arch’. He delayed his decision for three months. It is due in July.

“It’s energy inefficient,” he says. “We spend a fortune on maintenance and it is about to be detrimental to our brand.

“No amount of money will restore that store to its current state. The only option is a complete rebuild.

“It could be the most amazing store in the most amazing destination. But it’s very hard when you can’t get a decision.’

If his plans to rebuild are rejected, he will take M&S out of Marble Arch after 93 years. “If this doesn’t work, I don’t see an option,” he says.

Much to the relief of long-suffering small investors, shares of M&S are up nearly 20 percent this year, but there’s still a lot to make up for. M&S was kicked out of the elite FTSE 100 in 2019 and its shares are still well below the £4.00 offered by Sir Philip Green in a takeover bid nearly two decades ago. Dare we hope that the elusive M&S recovery will finally materialize?

“I don’t think we’ll ever declare victory, certainly not under my leadership,” says Machin. “There are always more challenges. We can go from hero to zero and back again very quickly. I want sustainable growth.’

A fly in the ointment is Ocado Retail. In 2019, M&S paid £750 million for a 50 per cent share in a joint venture with Ocado Group to deliver its products online.

But the division’s turnover was down 1.2 per cent and M&S’s share of the net loss was almost £30m. He says he wants it to be in positive territory in the next two to three years.

“We had no choice but to go online. We couldn’t do it ourselves and we couldn’t do a store selection model because we have too many small stores.”

Hannah Gibson has led the Ocado Retail division since September. Machin says, “She’s really focused on the customer, on service, on the new platform, web development and how that will change over the next 12 months. She is very focused on value. Four hundred more lines have passed.’

Inflation has been a big scare, with a £50 million increase in energy costs. And last year £100 million was added to the wage bill.

M&S has eroded profit margins to soften the blow to consumers. A program is underway to save £400m in costs over five years.

Machin points to the fact that M&S ​​bought Gist, its logistics provider, last year to cut costs and gain more control over its supply chain. “We’ve already benefited by £25 million,” he says. On the fashion side, M&S has successfully introduced outside brands – including Sosandar, Hobbs, Nobody’s Child and Seasalt – with more in the pipeline. The decision to close some high street stores has sparked unrest in some local communities. Closures, he says, are only part of the story. M&S is investing around £500 million in a ‘store rotation’ programme.

In addition to closing 67 low-productivity stores, the plan is to have 180 full-line stores by April 2026 and open more than 100 new food halls. The idea is to grow through omni-channel shopping, where do-and-mortar stores work in harmony with the online business so that customers can buy when and how they want.

“We should have had a real estate strategy 20 years ago,” says Machin. ‘The competition has very good shops and we have an aging estate. You could say we should close some of them faster.’

Before joining M&S, Machin worked at Sainsbury’s, Tesco and Asda, and spent ten years in Australia. He was the managing director of Target, a subsidiary of Australian conglomerate Wesfarmers, but resigned in 2016 following an accounting investigation. He was, he said, unaware of the problems, but accepted some responsibility when they occurred under his watch.

He was appointed general manager of M&S’s nutrition division two years later and last year became co-chief executive with Katie Bickerstaffe, in an arrangement that raised eyebrows. “It works well with Katie,” he says.

‘It wasn’t quite clear in the first few weeks because we both had new jobs, but we bounce off each other. Katie is a fantastic partner. She is a very strong number two.’ As a youngster he wanted to teach religion, but in his teens he caught the retail bug through part-time jobs. “Work is probably my hobby,” he says. “It has always defined me. I enjoyed the Eurovision Song Contest in Liverpool, but I visited four shops along the way.’

Machin has a likeable demeanor, but it’s clear there’s a steely side to it – and that he’s relentlessly seeking improvement.

“I have a healthy paranoia,” he says. “Everyone knows I ruffle a few feathers. They all know what I am like.’ He himself tries out the recipes for M&S from top chef Tom Kerridge to see if the ingredients are all available and how easy they are to make. “I like to cook the recipe and time myself to see how long it takes,” he says. He emails Kathryn Turner, the director of product development, at least once a day with his observations. Machin is “obsessed with shrink inflation.” He says, “I measure everything. Without naming names, some big brands charge the same price for a smaller product – but not us.

‘I thought our Turkish Delight bar had gotten smaller, but everyone assures me that’s not the case. “I recently complained because I thought the lettuce wasn’t crispy enough.

“Everything new, I’ll buy it right away to eat.” He personally tests every new food product and expresses his feelings if they don’t go down well. He adds, “I call that protecting the magic.”