Fiasco over results tests M&S’s loyalty to Tulchan

David Hellier
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THERE is little more certain in life than this: one firm’s misfortune will be seized on by rivals desperate to take advantage of another’s woes.

So it is that a host of financial public relation agencies have been bending the ears of Marks & Spencer executives to test the retailer’s loyalty to its incumbent agency Tulchan.

Their interest in contacting the retailer was sparked by a decision by Tulchan to rush out a disappointing M&S results statement owing to a leak.

The decision put M&S on the back foot ahead of a difficult announcement, in which the company’s performance in certain sectors was below market expectations.

By midweek more than one source tried to convince me that Tulchan had lost the account, which it has held since 2005. Some said Brunswick supremo Alan Parker had been in touch and that it was only a matter of time before his firm would be instructed. For the time being, though, M&S, Tulchan and Brunswick, insist that nothing has changed.

For its part, Brunswick might have difficulty in acting for M&S since it also acts for Tesco, whose chief executive Philip Clarke has made it clear he would not be happy with such a conflict. RLM Finsbury is also conflicted, being Sainsbury’s main external financial adviser.

As for Tulchan, for whom M&S is a large client, this has been a tricky few days. Friends said it had no choice but to bring forward the M&S results after a leak to Sky’s Mark Kleinman (also a City A.M. columnist) in the early evening ahead of a scheduled morning announcement.

The company’s lawyers advised that there had been a leak of the results resulting in uneven knowledge in the market which would be unfair to shareholders. “There was a choice,” said one person privy to the discussions. “Either suspend share dealings or accelerate results. Suspension is unpopular and not a complete fix (eg. derivatives might still trade, affects indices, company not able to articulate its story) so as all virtually ready for announcement just accelerate the process.”

In the past there have been examples when companies have brought results forward (Kingfisher, after numbers were leaked to analysts, for example) but such a dramatic release of results after hours is virtually unprecedented.

Some say Tulchan should have over-ridden the legal advice and waited until the morning to announce results as usual. But to do so would have almost certainly risked the wrath of the ever watchful regulators. In any case it seems unfair to blame the firm for adhering to the advice of the lawyers. Tulchan’s Andrew Grant has served M&S well over the last eight years and deserves to ride out this particular storm.

Andrea Orcel’s view, articulated at a recent parliamentary committee on banking standards, that UBS suffers from a lack of women, will no doubt face scrutiny going forward.

So far the investment bank chief executive has made at least three senior female appointments; Beatriz Martin Jimenez is his chief of staff; Sara Ferrari has become head of strategy and Michelle Bereaux is interim chief operating officer.