Revamp to make M&S ‘special again’ – Rowe
MARKS & Spencer is speeding up plans to shut under-performing clothing departments and scaling back expansion of its Simply Food outlets as it bids to become “special again”.
Chief executive Steve Rowe, who took charge last year, said his five-year turnaround plan had begun to remedy the “immediate and burning issues” amid signs of improvement in its clothing business, but fierce competition has eaten into its food operation’s margins.
Its clothing supply chain will be revamped to reduce costs, while Rowe is targeting a third of its clothing and homeware sales to be made online, up from just below 20 per cent at present.
Chief finance officer Helen Weir is to step down after less than three years to pursue “a more diverse portfolio” of jobs, but will stay on until a successor is found. Half-year profit fell 5.3 per cent to £219.1milion on 2.6 per cent higher revenue of £5.12billion
Rowe said: “The offering had become confusing. People didn’t understand what we stood for. Our international business was failing. There were fires across the business we had to put out.
“We have begun to change the culture and ways of working. We have simplified the way we buy and reduced the number of lines by 10 per cent. We have upgraded the quality of garments and reduced the price on 2,500 lines.
“M&S continues to be disrupted on many fronts. There are competitors who were barely there a decade ago. Some of our competitors are global with a far greater scale than we have. That goes for food as well as clothing. Value for money is higher up the agenda. We have to tackle our legacy cost base and supply chain and become a digital first retailer.” Like-for-like clothing sales were down 0.7 per cent, but full price sales rose 5.3 per cent due to fewer clearance sales and promotions.
New openings lifted food revenue 4.4 per cent, but same-store sales dipped 0.1 per cent and margins were squeezed as M&S limited price increases to customers.