Marks & Spencer's Sir Stuart Rose bags £1bn

Sir Stuart Rose has had a bumper year, but he knows the hunt is already on to find his successor, says Richard Fletcher

Valentino is a nondescript Italian restaurant on the Edgware Road, a "local" best known for its home cooked food.

	Four years after he was parachuted into M&S, Sir Stuart Rose looks set be crowned the 'billion pound man'

In recent weeks a string of Marks & Spencer's most senior executives have all eaten at the restaurant - guests of Sir David Michels, M&S's senior independent director, deputy chairman elect and a "regular" at the Italian. Over a "nice dinner" and a bottle of Italian "plonk" M&S's rising stars have been quizzed by Michels.

The setting may be informal - and the non-executive's questioning broad - but the Valentino dinners mark the start of a very formal process to find the next chief executive of M&S, the UK's largest clothing retailer and the grande dame of the high street.

Under pressure from some of the retailer's largest institutional investors - eager to ensure that M&S does not repeat the mistakes of the past - Michels has kickstarted the race for one of the most sought after jobs in retailing.

In the coming six months the former Hilton chief executive plans to get to know his executive directors better and watch closely to see how they grasp their new responsibilities.

More on retail

Sir Stuart Rose, the current chief executive of M&S and executive chairman elect, may plan to remain at M&S for another three years - but the search for his successor has already begun.

On Tuesday morning Rose will step onto the stage at Deutsche Bank's London headquarters and unveil the retailer's full year results to analysts and shareholders.

The presentation will be upbeat, with M&S forecast to post pre-tax profits of more than £1bn, breaking the symbolic profit barrier for the first time in a decade. Four years after he was parachuted into M&S, Rose looks set be crowned the "billion pound man".

But it won't just be City analysts and shareholders who will watch Rose's now legendary performance - complete no doubt with his usual "barrow boy" demonstration of the quality and value of M&S merchandise.

Sitting in the front row of the Deutsche Bank auditorium will be Rose's potential successors. Ian Dyson, group finance and operations director; Steven Esom, executive director foods; Kate Bostock, executive director clothing; and Carl Leaver, director of international business have all been tipped as frontrunners to succeed Rose.

When the 59-year old Rose declared in March that he would remain with the retailer - as executive chairman - until July 2011 he made little secret of his desire to groom an internal successor in his final years.

But despite Rose's public pronouncements back in March, executives close to the retailer now insist that he is not wedded to the idea of an internal successor. "It is a preference. But it is not a religion," said the executive.

Michels is also said to be keen that a successor comes from within, but does not assume that an internal candidate will emerge. It is not just Rose and Michels who have expressed doubts about the group's decision to focus exclusively on internal candidates.

Privately, institutional shareholders have raised concerns about the strategy. Some fear that a three-year contest for the top job could cause division in the boardroom. Others question whether any of the internal candidates are really up to the job.

M&S has a bad reputation for succession planning among investors, which has not been enhanced by the corporate governance row over Rose's elevation to executive chairman.

BUSINESS Credit crisis UK Steel and not credit is the sign of this city's troubles.

TRAVEL Bank holiday tips It's not too late to make the most of the weekend.

MUSIC France is furious Sebastien Tellier's Gallic Eurovision entry is in English.

FEATURES It's a knockout There was nothing tacky about the Royal Wedding.