CLOSE-UP: LIVE ISSUE/MARKS & SPENCER - What next for M&S as McWalter leaves? Camilla Palmer reports on the exit of the director who pulled M&S above the line

There was a collective intake of breath last week following the resignation of Marks & Spencer's director of group marketing, Alan McWalter. This was the man who helped revamp the then-flailing retailer's entire marketing strategy, hired Rainey Kelly Campbell Roalfe/Y&R as its above-the-line agency and spearheaded a return to brand advertising. And the question on everyone's lips is whether his departure will mean a return to the old days for M&S?

McWalter's resignation was announced as part of the company's restructure. Roger Holmes took over as the new chief executive, leaving Luc Vandevelde in a part-time chairman's role, and quickly set out plans for a changed board.

M&S's three major retail sectors, food, clothes and financial services, will all retain representation on its board, but marketing has been relegated to non-plc status and will be run from the newly formed operations committee, alongside stores, human resources and IT.

Vandevelde last week credited marketing with playing a crucial part in M&S's recovery over the past six months. However, the implied demotion of the department points to an about-turn in the company's marketing and advertising strategy after the publicly flaunted arrival of McWalter from Kingfisher two years ago.

Though M&S had been a British brand with an open disdain for advertising, McWalter and other senior management rewrote the company's rulebook to put the discipline somewhere near the centre.

M&S then gave the go-ahead to hire RKCR/Y&R; however the "I'm normal" campaign that followed can have done little to bolster its faith in above-the-line activity. Handicapped by a product line that still failed to hit the spot, the campaign turned some consumers off and did nothing to help turn around poor sales.

McWalter, who is due to leave M&S's Baker Street offices at the end of July with a £300,000 severance package, claims the restructure comes as no surprise and denies he was "pushed out", saying he will be on "standby for however long Holmes needs him. He also stresses that advertising and marketing are still as important as before.

"We've just increased our budget for above-the-line activity, and M&S is focused on developing its brand through advertising, McWalter claims.

RKCR/Y&R executives similarly claim to be unfazed by his departure, claiming that it's business as usual on several forthcoming campaigns. Some, however, are less optimistic.

"Of course this will mean a step-change in the regime he's built up, and it is significant that he's decided to go, one source close to the account says.

Jude Bridge, the ex-Publicis executive whom McWalter hired in 2001, will assume his duties until a replacement marketing director can be found.

McWalter insists his departure is not a signal that Holmes is set to undo all his hard, if sometimes flawed, work. But product-oriented campaigns such as the current "Perfect ads, which have been credited with shifting stock, seem more likely to survive than the controversial brand work, forever identified with the naked size-16 woman, which McWalter now recognises as something of a mistake.

However, McWalter remains bullish about M&S's future in advertising, and says it won't be abandoned.

"I'm really proud of what we've achieved, he adds. "Before, the marketing strategy was disparate and inconsistent. I'm confident I'm leaving at a strong point for that strategy going forward."

He claims the restructure is an indication of just how embedded marketing and advertising have become in M&S's culture.

"It will be run alongside crucial elements of the business - it is part and parcel of M&S, McWalter says. However, he also admits that he would probably have stayed on had he kept a position on the board.

Other marketing initiatives, such as the restructure of its customer relations management and below-the-line activity, will continue as before, according to McWalter.

"In-store or direct activity will continue to act on the brand consistencies that we've built up, he says. KLP Euro RSCG and TBWA GGT Direct both share the direct marketing account.

However, McWalter's greatest influence has been through his loyalty to above-the-line advertising and the agency he picked to create it. He claims that RKCR/Y&R has an unparalleled grasp on the nature of M&S.

But whether such a belief is well-founded within the company remains to be seen.

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