Vittorio Radice, chief executive of the upmarket department store group Selfridges, has announced his resignation and a move to high street rival Marks & Spencer.

Mr Radice will step down in February 2003 to head up the Home business at M&S, which includes furniture, crockery and bed linen.

He will be replaced by Selfridges' current finance director Peter Williams.

"Vittorio is one of the most able retailers of his generation and I am delighted he has chosen to join the top team at Marks & Spencer," said M&S chief executive Roger Holmes.

For a candidate of this calibre, it is the market rate and he is an exceptional retailer

Marks & Spencer

"His appointment shows how serious we are about developing our Home offer as part of our growth strategy."

So serious it seems that M&S is willing to pay �1.2m to recruit Mr Radice, viewed by many in the City as one of the strongest names in retail.

Italian flair

Mr Radice was credited by many analysts as the engine behind Selfridges's success, including the group's decision to expand away from its flagship London base through regional stores.

The Italian retailer was also behind much of the 'theatre' of Selfridges' Oxford Street store, such as its successful "Bollywood" promotion last year.

It's good news for Marks but it's far from a disaster for Selfridges

Richard Ratner, Seymour Pierce

He will receive a �1.2m 'golden hello' for joining M&S as well as an annual salary of �425,000 and the chance of doubling his salary if he meets performance targets.

A spokeswoman for M&S defended the salary package, which also includes a pension contribution of up to �120,000.

"For a candidate of this calibre, it is the market rate and he is an exceptional retailer," she said.

The group is in the midst of a �250m redevelopment of the London outlet, which will include offices, a gym, hotel and car park.

Selfridges has opened two stores in Manchester and identified Birmingham, Leeds, Newcastle and Bristol as contenders for new sites.

Sparks are back

M&S meanwhile has been sustaining its long-awaited revival and fending off competition from other high street operators.

Last month, the group beat analysts' forecasts with a leap in profits for the first half of the year thanks to new clothing ranges and the expansion of its food offering.

But the group has also committed to expanding its homeware division, where Mr Radice will now be able to apply his skills.

Investors in Selfridges clearly felt his loss, with shares losing 6% to 252p while M&S shares lost 2p to close at 326p.

A Selfridges spokeswoman insisted the move had come as no surprise to anybody.

"In the last year or so, it's been apparent that Vittorio won't be there forever," she said.

Richard Ratner, retail analyst at Seymour Pierce added:

"It's good news for Marks but it's far from a disaster for Selfridges."