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* Steve Rowe to replace Marc Bolland as CEO
* New boss faces task of improving clothing sales
* Bolland says told board last year he wanted to leave
* Announcement follows poor Christmas for M&S clothes (Adds detail, analyst comment, updates shares)
By James Davey and Kate Holton
LONDON, Jan 7 (Reuters) - Marc Bolland will step down as theboss of retailer Marks & Spencer in April, bringing anend to a turbulent tenure in which he modernised the132-year-old British institution but failed to bring itsclothing back into fashion.
Bolland, who has been chief executive for six years, will besucceeded by company veteran Steve Rowe in arguably the mostprestigious - and high-profile - job in British retail.
For generations, children went to school in M&S clothes,teenagers turned to it for their first work interview suits andshoppers of all ages bought its underwear.
But the advent over the last 20 years of fast, cheap fashionat one end of the market and affordable luxury at the other -combined with fierce online competition - has left M&Sstruggling to return to its glory days.
Londoner Rowe, 48, faces the task of finding the formulathat eluded Bolland at M&S; he must lure shoppers back to itsclothes, dispelling its outdated image of recent years, and seekto match the success enjoyed by its upmarket food business.
Bolland spent billions of pounds on the redesign ofproducts, stores, supply chain logistics and the website toaddress decades of underinvestment but failed to deliver asustained rise in clothing sales to accompany the profit margingains he did achieve.
The 56-year-old Dutchman announced his departure after yetanother poor Christmas showing for the firm's generalmerchandise division - of clothing, shoes and homeware - thatsaw sales slump.
The division accounts for around two-thirds of group profit,so its success or failure is likely to determine Rowe's ownfortune as CEO of a company where he has worked for more thanhalf his life.
NO INVESTOR PRESSURE
Bolland said he had informed Chairman Robert Swannell lastsummer he wanted to retire in 2016 if a suitable candidate assuccessor could be found.
"Right from the outset I saw my tenure as a five to sixyears term," he said, noting that when added to his time leadinggrocer Morrisons he had spent a decade in the UK.
Swannell said Bolland had not been under any pressure toleave, from either the board or shareholders, and one investortold Reuters he had not expected his exit so swiftly.
"(The news was) quite a surprise, although it is notuncommon for CEOs to move on after that kind of tenure," saidRichard Marwood, senior investment manager at AXA InvestmentManagers, one of the company's top 40 shareholders.
"Having somebody already in the business succeeding him isprobably no bad thing. I don't think we are looking for a changeof direction. Investors are still waiting for the Bolland planof a more cash generative, well invested and internet enabledbusiness to be fully delivered," he added.
Swannell said other internal candidates, as well as externalones, were considered but that Rowe had been the stand-outfigure. "He has a deep knowledge of the business, he knows itinside out."
Rowe, a Millwall soccer club, golf and scuba diving fan, hasmade no secret of his desire for the top job, telling Reuters in2014 he would love to be boss of "the best retailer probably inthe world".
As an 18-year-old he started out at fashion chain Topshopand his 26-year M&S career has included stints in menswear,homeware, beauty and e-commerce. He has served under eight M&Schairmen and six CEOs.
He was named head of M&S food in 2012, and delivered 12straight quarters of underlying sales growth and anoutperformance of the wider industry, before becoming head ofproblematic general merchandise last July.
STRONGER FOOTING
Analysts said Bolland had put M&S on a stronger footing -with the food business taking market share and online salesimproving - giving Rowe a stronger platform than Bolland hadwhen he took over from Stuart Rose in 2010.
Shares in M&S rose 19 percent under Bolland's tenure,outperforming the 6.5 percent gain recorded by the overall FTSE100 blue chip index, but way behind the 213 percent gaindelivered by rival Next.
M&S shares were down 1.2 percent at 433 pence at 1351 GMT onThursday.
Bolland had improved the company's financials by focusing ongrowing gross margins - the difference between the price M&Spays for goods and the price it sells them - which had helped itto deliver a first profit rise in four years, a higher dividendand a share buyback programme.
But weak clothing trading in the run-up to Christmas for thesecond year in a row shows the group is still struggling toproperly compete with British rivals such as Next and John Lewis and fashion chains including Zara and Reiss.
In the third quarter, which includes the Christmas tradingperiod, like-for-like sales at the general merchandise divisionfell 5.8 percent. It said unusually warm weather that deterredpeople from buying winter clothing was partly to blame - afactor also cited by Next for its poor Christmas - but alsoadmitted to poor availability of some items.
M&S did, however, nudge up its margin guidance for the division, reflecting a decision to hold back on discountingproducts.
By contrast, M&S said its food business enjoyed its bestever Christmas. Like-for-like sales were 0.4 percent, a 25thstraight quarterly rise. (Additional reporting by Sinead Cruise; Editing by Keith Weirand Pravin Char)
