M&S STORES AXE IS LONG OVERDUE
Former bosses failed to take action to halt slide
They were too scared. They would suggest a closure then back down
JUDI BEVAN ON CHAIN’S PREVIOUS BOSSES
STRUGGLING small-town branches of Marks & Spencer should have shut years ago, according to the woman who has written the retail icon’s history.
Judi Bevan said the chain’s previous bosses were not brave enough to axe loss-making outlets.
She added: “They were too scared. They would suggest closing a store and there would be an outcry and they would back down.”
Current boss Archie Norman is sticking to his guns and pulling down the shutters on branches in East Kilbride’s Plaza shopping centre and on Falkirk’s High Street.
It’s part of a radical five-year plan to turn the business round by closing more than 100 stores.
Steve Burt, professor of marketing and retail at Stirling University, said closures will hit towns hard.
He added: “They are a symbol of confidence and pride. People like to know their town has an M&S. They have not been performing brilliantly but they are still an iconic brand.”
The closures will, he says, leave gaping holes.
Burt said: “No one wants units that size.
“The only takers are the likes of Primark, Zara and H&M – and they have all the premises they need.”
Retail guru Mary Portas says M&S have failed to keep up with people’s priorities.
She added: “There have been big changes to the way we live. Healthy living is more important. Millennials are looking at where their money’s going and much more of it is going into things that feed their lives and not just more stuff.”
M&S, with their ageing customer base, huge stores and enormous range of shops, have been outrun by smaller, smarter competitors.
Portas said: “You have to be nimble. You have to be able to put the needs of the way we live at the centre of any retail business.”
She points to Zara as stealing M&S’s younger customers.
Portas said: “They are fast to market and understand trends. It’s a very clever business model.”
What M&S do have is a place in our hearts. Portas reckons the home of comfy pants and dinner for £10 needs to build on that.
She said: “The thing for M&S is to hang on to the equity of what they have. There’s a real emotional connection there. But they need to redefine their position for tomorrow and not just for today.
“We should be reshaping high streets and understanding their importance to people. At the heart of that should be retailers who are nimble, effective, innovative and risk-takers.”
EMBATTLED Marks & Spencer have admitted their online arm isn’t up to scratch – as they revealed a slump in profits.
The firm, fresh from announcing 100 store closures, said their website was “behind the best of our rivals” and “too slow”.
They also admitted their Castle Donington depot in Leicestershire, used for dispatching online orders, struggled to cope at busy times. It came as M&S revealed full-year profits crashed 62 per cent to just under £67million in the year to March 31 after a £320million hit from their plans to close failing stores and revamp the business.
Clothing and homeware sales tumbled 1.9 per cent, although profit margins edged higher as they reduced levels of discounting.
But rising costs ate into profit margins in their food business, where takings dropped 0.3 per cent.
M&S insisted closing one in four of their high street stores was needed to get the business back in shape. And they claimed their website was being improved.
Chairman Archie Norman said: “We’re deeply conscious of the fact that our middle name is False Dawn,” referring to previous turnaround plans that fell flat. “I’m convinced that this is a turning point in our history,” Norman insisted. “Seeing is believing, so watch this space.”
M&S boss Steve Rowe said: “There are a number of structural issues to address and we are taking steps towards fixing these.”
Despite the drop in sales, the chain grew customer numbers for the first time in five years.
Profits excluding the store closure costs fell 5.4 per cent to £580.9million.
Marks’s share price jumped five per cent yesterday but it is still worth less than younger upstarts Ocado and ASOS, and the business risks being demoted from the FTSE 100 in a reshuffle due next week.
Kate Ormrod, lead analyst at industry analyst GlobalData, said: “M&S need to show more commitment to radically streamlining their clothing offer, removing product repetition and making their ranges easier to shop.”