Novelist. Author of APSARAS and tales from the beautiful Saigh Valley. First person to quantify spiritual values.

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Monday 23 August 2010

New Chairman of M & S

Mr Swannell, who helped M&S in its defence against retail tycoon Sir Philip Green's takeover bid in 2004, will join the board of Marks and Spencer on October 4 as non-executive director before he replaces Sir Stuart Rose as chairman on January 4.

The former chairman of US bank Citigroup's European operations and current chairman of HMV will pick up an annual salary of £450,000 for the non-executive job.

Mr Swannell is also non-executive director of property investor British Land and infrastructure investor 3i.

I may be wrong but does the hiring of an investment banker to head these diverse companies tell us something. That no matter what product or service you are trading, it cannot beat investment banking for churning out huge profits. I wouldn't be surprised if these companies will be looking to make more money from the City than they will from their core businesses.
Look at BAA. It's hard work making a profit from running airfields. Staff are a continual problem with their demands for better pay and conditions. Returns on money invested drop as the recession means less people flying whilst overheads continue to rise with inflation. How much easier it must be operating from the luxury of an air conditioned building without ever getting your hands dirty or dealing directly with the public. Selling clothes in the fickle fashion industry is risky. No wonder M & S are turning, not to a man with years of retailing experience but a banker with 'connections'and years of experience trading cash and lots of it.

Why should anyone enter business to do anything but investment banking? Something has to change to make banking less attractive and manufacturing and innovation more rewarding.

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