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M&S hands brothers lucrative sourcing deal

Business News

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The brothers drafted in by Marks & Spencer's last boss to generate huge savings from its supply chain have been handed a lucrative new deal as the company prepares to shake up the leadership of its key clothing business.

Sky News has learnt that Mark and Neal Lindsay, who were expected to leave this year at the end of a three-year contract, have been persuaded to remain with the retailer by Steve Rowe, its chief executive.

The decision underlines Mr Rowe's determination to stamp his mark on M&S' executive team a year after he took over from Marc Bolland.

In a memo circulated to staff on Friday, Mr Rowe said he was "delighted to announce that we have agreed a new contract with both Mark and Neal Lindsay as Sourcing Directors of M&S".

The retention of the brothers, who made their reputations as the architects of rival Next's widely admired sourcing operations, comes just weeks before Mr Rowe is expected to hire a new boss for M&S' clothing and home operations.

"Mark and Neal have a wealth of experience in sourcing and it is great news for Clothing & Home that we can continue to leverage this experience as we deliver the key strategic priorities going forward," he wrote.

Mr Rowe is under pressure to deliver early evidence in his tenure of an improvement in the performance of M&S' general merchandise business, which struggled under Mr Bolland's leadership.

Gross margin gains have been a rare bright spot for M&S' clothing unit, which has seen like-for-like sales decline in the vast majority of the last 20 quarters.

The Lindsays' remuneration is not publicly disclosed, as they are not on M&S' main board, but are each understood to have been paid several million pounds under a contract which saw them receive a fixed proportion of the savings generated by the increase in M&S' gross margin.

In total, hundreds of millions of pounds are said to have been extracted from the retailer's cost base over the last three years.

Mr Rowe's decision to keep the brothers at the company comes the day after he unveiled the first phase of a store closure plan announced last November.

Six town centre shops will be shut, but M&S has pledged that the 380 staff affected will be found alternative posts elsewhere at the company.

M&S is also searching for a new chairman to replace Robert Swannell, the former investment banker who will step down later this year.

M&S declined to comment beyond confirming the contents of Mr Rowe's memo.

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