Old-fashioned ideas will never lift ailing retailer

Flicking through the weekend magazines on Sunday, my eye was caught by an advertisement that declared it was “Introducing the vest that thinks it’s a bra.” This is the kind of offer that’s close to the heart of a middle-aged hack and businessman who has too many corporate lunches and doesn’t do enough exercise.

Or maybe it was its resonance with an ad I recall from my salad days for, I think, Whitbread Trophy Bitter: “The pint that thinks it’s a quart.” It seems to me that these two ads are connected through the generations by a mysterious nexus. In the brassiere world, I have seen all too many quarts squeezed into pint pots.

Starting to toy with “the pint that thinks it’s a bra”, I read on. “Outside it looks like a normal vest. Inside there’s a hidden lining. The Secret Support range gives you the support of a bra, with superb comfort, and no unsightly straps.” It turns out that this is “Good thinking from Marks & Spencer”.

To lay into M&S now is like reminding Kevin Keegan on his summer break that he needs a left-footed midfielder. But this ad tells us much that we need to know about the developing ailments of the elderly great-aunt of British retailing. “Vest” is such an M&S word: middle-England and resonant of winceyette pyjamas and thermal underwear.

My 14-year-old daughter says one of the models in the ad is wearing a “spaghetti-string top”. Even allowing for the fact that she is a quarter Italian, this type of phraseology has to be more of the moment than “normal vest” (and I presume she is in the target market).

Inside M&S, there sure as hell is a “hidden lining”, as this year’s supposed cure-all executive chairman, Luc Vandevelde, will have discovered. With a £2.2m “golden hello” from M&S’ battle-weary shareholders, Vandevelde must have thought it was something of a silver lining. What was hidden was the lead lining – the kind that used to be put in coffins for burial at sea and is like the inertia and arrogance of the past that continues to drag M&S down.

Vandevelde and embattled chief executive Peter Salsbury must have fantasised about improving M&S’ share price during the first half of this year. The company’s shares are about 222p at present, against a 12-month high of 337p.

Vandevelde’s remuneration package – a generous share-incentive scheme and a rolling contract at advantageous variance with his executive colleagues (as well as that “golden hello”) should undoubtedly provide “superb comfort”. But there are “unsightly straps” – not least of which is the prospect of a continually struggling M&S, strapped for “good thinking” as well as for cash.

I don’t only read ads for women’s underwear at weekends. I also noticed, in the Sunday Times, that Salsbury is expected to be sacrificed in the autumn. There is a fine and honourable tradition in British industry of chief executives taking the rap for their chairmen. Ask Bob Ayling, late of British Airways. But it is difficult to see how the cast list in the M&S show can remain the same without the curtain falling for a final time – or a bidder stepping in to put the whole troupe out of its misery.

Latest trading figures show sales fell 0.2 per cent in the 16 weeks to 15 July, with clothes sales estimated to be down three to four per cent – the autumn collection failing to blow the market’s dress up. This follows a slashed dividend (the first such reduction in 74 years) and a slump in profits last year from £1.1bn to £656m. Analysts now expect a further fall this year to between £530m and £550m.

There have been signs that tough times call for tough measures. Last year, M&S cut its 30-year supply agreement with William Baird (and is now embroiled in litigation as a result). Now M&S is ordering other suppliers, such as Coats Viyella and Courtaulds, to cut their prices by two per cent.

It may be that M&S is playing hard-ball with its suppliers. But it can hardly fire partners of 30 years’ standing and expect a sympathetic hearing from the remainder. They now know their relationship with the retailer may not be a long one. It is much more likely that, as one shareholder put it at the AGM last month, Vandevelde and his colleagues will spend too much time “sitting in ivory towers in Baker Street looking at sheets”.

Former M&S chairman Sir Rick Greenbury – he of the eponymous report on executive remuneration that Vandevelde evidently ignored – probably spent too much of his time working on front-line detail. For instance, he used to personally approve ads (and I wonder whether the “vest that thinks it’s a bra” would have got past him).

Maybe we shouldn’t read too much into a bra ad, but unless Vandevelde and Salsbury get abreast of matters at high-street level they risk looking like – in terms appropriate both to their ads and the silly season that we’re about to embark on – a right pair of boobies.

George Pitcher is a partner at issue management consultancy Luther Pendragon