Archie Norman

Archie Norman

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Marks & Spencer (MKS) has appointed former Asda CEO Archie Norman as its new chairman.

He will succeed Robert Swannell – who is set to retire after seven years on the board – from 1 September.

Norman has a long track record in retail and working with brands, including Kingfisher and Energis, but is best known for his stint turning around the fortunes of Asda in the 1990s before the sale of the supermarket to Walmart.

He has also previously served as chairman of ITV, Lazard London and Hobbycraft. In 2016 he was appointed by the Department for Business, Energy and Industrial Strategy as its lead non-executive board member.

Shares have leapt 3.5% to 369.9p at M&S this morning as the markets responded to the news.

It is the latest management change at M&S as the high street bellwether attempts to re-energise the business. Last year, the retailer appointed food boss Steve Rowe as group CEO, and earlier this week it announced it had poached Halfords chief executive Jill McDonald to revive the fortunes of the flagging clothing division.

“I am looking forward to taking on the role of the chairmanship of Marks & Spencer as the business under Steve Rowe’s leadership faces into the considerable challenges ahead in a rapidly changing retail landscape,” Norman said.

Swannell added: “I am delighted that Archie, with his deep, relevant experience is to be M&S’s next chairman.

“It has been a real privilege to have served as chairman and to have worked with so many exceptional people who are so passionate about this great business. With the appointment of Steve Rowe in 2016, I am confident that we have an excellent team, well-equipped to grow and strengthen the business. I wish them all the very best for the future.”

Vindi Banga, M&S senior independent director, who led the selection process, said: “Having conducted a very rigorous appointment process, it was clear to us that Archie was the best person to be chairman. Archie is one of the most respected business leaders in the UK with extensive experience as both CEO and chairman, and a proven record in retail and other areas. We are delighted he has accepted.

“I would also like to thank Robert on behalf of M&S for his great contribution and commitment to the company over the last seven years. He will be much missed and we wish him well for the future.”

Morning update

Listed real estate investment trust LXi REIT has agreed to fund £10m for the development of a new discount retail park in Bradford to be anchored by a 20,000 sq ft Aldi store.

The discount supermarket has pre-let the space at the development alongside Home Bargains owner TJ Morris, which will take a 16,000 sq ft store. Aldi has signed a 20-year lease and TJ Morris a 15-year lease.

A further 5,000 sq ft unit has been pre-let to discount frozen food retailer Heron Foods, which has 240 stores throughout the Midlands and North of England. The unit has been pre-let on a new 10-year lease.

The Yorkshire property includes an additional 5,000 sq ft retail unit that the developer is currently marketing.

The new development is based on a 6.4 acre site, which includes parking for 210 cars, located 2.5 miles west of Bradford city centre.

LXi partner John White said: “We are delighted to provide the forward funding for this new discount retail development anchored by Aldi and Home Bargains. Aldi and Home Bargains are very strong tenants and successful companies in the fast growing discount retail sector.

“The 6.15% net initial yield is above the company’s target average yield and the property will benefit from a strong residual value given the dense catchment population and low starting rents.

“We are also in advanced discussions on a number of similar discount retail projects, as well as additional pre-let forward fundings and built assets in other sectors, which are expected to come to fruition shortly.”

Yesterday in the City

The Morrisons (MRW) turnaround may be well and truly gathering some impressive pace but the City remained in less than bullish mood about the prospects of a tough supermarket sector. Shares in the Bradford-headquartered grocer slumped 1.9% to 234.4p despite it showing the best growth of any of the big four, with like-for-like sales growing 3.4% in the first quarter.

However, the fortunes of rival Sainsbury’s (SBRY) on Wednesday – with profits continuing to decline – meant investors were still cautious about the prospects of the listed supermarkets, especially as growth at Aldi and Lidl showed no signs of slowing down. Sainsbury’s, which crashed 5.7% after its full-year results were published, fell another 1.6% to 259.4p.

Tesco (TSCO) escaped the worst of the sell-off, down just 0.1% to 176.7p, and Ocado (OCDO) fell 0.4% to 262p.

Investor gloom also hit the high street as Next (NXT) warned of deteriorating results on the back of toughening consumer conditions. The retail bellwether plunged almost 6% to 4,150.4p as it reported an 8.1% slide in sales during the first quarter. Marks & Spencer (MKS) nosedived 2.5% to 357.5p as a result.

Other fallers yesterday included Imperial Brands (IMB), Associated British Foods (ABF) and McColl’s (MCLS), down 2% to 3,629.5p, 1.2% to 2,795p and 1.1% to 195p.

Kerry Group (KYGA) had a good day – rising 2.5% to €79.16 – after declaring a “solid start to the year” and maintaining the positive business momentum reported in Q4 2016.