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Who Bemoans The So Called Strength Of Sterling

Well Marc Bolland CEO of Marks & Spencer MKS does

In fact, he was forced in yesterdays half year results to go for every excuse in the desperate CEO’s Excuses Handbook.Group half year sales were up by a miserable 1.4%. Like for like food sales were down. Like for like general merchandise sales were even more down.  The first response was to dole out sweeties to the shareholders – in this case a dividend increase of 6.3%

The strength of sterling is of course the favourite  for all those CEOs who have no shame and dare not admit the real reasons for their company’s poor performance.

What else does Bolland go for – he tritely trips out a list of what impacted his company;

Unseasonable conditions impacted performance. “The wrong leaves” attitude

Performance was significantly impacted by adverse movements in the Euro exchange rate..

Macro economic conditions continued to impact performance in the Middle East

No mention is made of Bolland or the directors impacting the company.

“The strength of sterling” is not only a platitude it is completely untrue. In 1992 the pound stood at 2.81 to the Euro so in 23 years it has halved in value. Even over the last nine years it is down by 6%. And Bolland sees these as signs of strength. That explains a lot as to why Marks and many other British companies have been knocked off their pedastals.

Against the US dollar the fall has been even more devastating. Some 70 years ago the pound was worth $4. Today it now worth $1.53.  That is 70 years of unremitting decline, decade after decade.

The truth is that a strong currency is the result of a strong economy, created by a country’s strong industry and commerce.

In the decades when the Deutschmark ruled the world and was the worlds strongest currency, did German industrialists ever bemoan the impact it was having on the German economy. Of course not.  They were proud of the strength of the Deutschmark because they recognised it as the product of a strong German economy.

What is it with Bolland and his ilk that they seem to be incapable of recognising the truth about sterling and its long term weakness. If more British CEOs and company directors knew their job, they too could be proud of a strong pound.

And its not just Bolland making these fatuous excuses. They are trotted out everyday. Today it is the turn of Shanks SKS.  Tomorrow it will be another household name trying to shift the blame for its poor performance, away from its Board and its CEO.

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