Sir Stuart Rose yesterday delivered his last throw of the dice to turn Marks & Spencer around before he leaves within the next two years.

The M&S executive chairman effectively promoted two of his lieutenants and announced the imminent departure of a third, as part of measures that he said would accelerate a change in fortunes for the 125-year-old retailer.

M&S shares closed down 27½p, or 8 per cent, at 311¾p last night amid signs that the City was losing faith in Sir Stuart’s turnaround plans and his ability to secure an orderly succession.

The reshuffle came as the company reported a 40 per cent plunge in profits and a 33 per cent cut in the final dividend.

Carl Leaver, who had led the international division, homewares and e-commerce businesses, is to leave by mutual agreement in the next three months, removing another potential successor to Sir Stuart.

Mr Leaver is understood to have been unwilling to relinquish his online and homewares responsibilities.

Steve Rowe is to be put in charge of the online business, while Kate Bostock, head of fashion, has been given additional responsibility for homewares.

Ian Dyson, the finance and operations director, is to be placed in overall charge of the latest initiative to reinvigorate the retailer, called Doing The Right Thing. Under the programme, M&S will revamp its IT systems, accelerate its online and international growth and establish a new marketing campaign based on the strapline, “Quality worth every penny”.

The shake-up suggests that Mr Dyson and Ms Bostock have pulled ahead in the race to succeed Sir Stuart. It is understood the retailer would prefer an internal candidate.

Sir Stuart said yesterday that he would leave “at the latest” in July 2011.

He denied that the departure of Mr Leaver weakened the strength of management beneath him. The executive chairman, who has drawn fierce criticism from shareholders for his combined role of chief executive and chairman, said when he extended his tenure last year that he wanted to give the board time to nurture a successor.

Mr Leaver, a former chief executive of the hotel group De Vere, who was believed to have had ambitions for the chief executive’s role, was appointed on the same day as Steve Esom, who led M&S’s food division. Mr Esom was abruptly removed and replaced by John Dixon last year.

Yesterday Sir Stuart said: “You have got to put it into context. There has been hardly any change to the top team of 12, 14 people in four years. John Dixon’s appointment was the only thing.”

Mr Esom was ousted when Sir Stuart decided to make M&S’s food more price competitive. “As I have said publicly, we had an accident on food last year,” he said.

He denied that Mr Leaver’s departure was related to the botched high-profile store opening in Shanghai, the company’s first in mainland China. But analysts said that the supply chain problems that beset the Shanghai opening were a major embarrassment.

Nick Bubb, analyst at Pali International, said that Mr Dyson was the favourite to succeed Sir Stuart, over Ms Bostock. Tony Shiret, of Credit Suisse, said: “This could enhance Dyson’s standing.”

Sam Hart, retail analyst at Charles Stanley, said: “The details around the turnaround are vague to say the least.” He added that the details appeared to have been delegated to Mr Dyson.

Doing The Right Thing is expected to add between £200 million and £300 million to capital expenditure in the next two years. In November Sir Stuart cut capital expenditure to £400 million for this financial year, from £700 million last year.

As part of its attempts to increase “multi-channel” sales — those that combine internet use and bricks-and-mortar stores — M&S is testing an in-store online ordering system from 50 stores.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax