Dizzying change at Marks
ChanGe is so fast and furious at Marks & Spencer that it is hard to keep up. The newcomers at the top – chairman archie norman and clothing and home boss Jill Mcdonald – have decided there is enough M&S experience with lifer Steve Rowe that some old hands can be dispensed with.
The days when M&S was admired for its terrific recruitment and culture are gone, as it brings in expertise from rivals.
It could be argued that the company’s travails began in the early 2000s when the board decided everyone else knew more about the M&S customer than those who advanced from the shop floor to the executive suite.
The shares, languishing at or near to a 12-month low, do not as yet show great confidence in the future.
Rowe’s policy is to focus on the uK and end the distraction of being overseas. other retailers primark and Jd Sports take the opposite approach.
under Mcdonald’s shake-up, womenswear and kidswear are merged under a single team with Jill Stanton, a veteran of next and nike, in charge. no one disputes retailing genius at next, which continues to exploit its digital skills to the full, but its fashion genius is less established.
as part of the shake-up, fashion guru Belinda earl, once chief executive at debenhams, has been given the prize of library prefect at the M&S archive.
Mcdonald assures everyone: ‘M&S clothing is transforming. We’re crystal clear on the challenge.’
The company wants to become more relevant to more people. This is an appeal to a younger generation brought up on throwaway and internet fashion rather than perceived quality of materials and cut.
But without doubt the most significant person to join M&S in this year of upheaval is former dixons carphone executive Victoria Self as head of digital. unless M&S comes up with a slicker, more compelling online shopping experience, and fast, it will remain stuck in the starter blocks.
Sporting chance
The immediate reaction on learning a British retailer is buying into the united States is caution. down the decades, american aspiration has been a graveyard for companies ranging from dixons in electronics, to M&S and Brooks Brothers in clothing, and Tesco’s Fresh & easy. Most recently, primark has chosen to scale back the size of some north american stores.
So why should we think that Jd Sports should do any better with its £400m swoop on uS sports enterprise Finish Line?
With some 550 stores across the uS and an exclusive franchise within the Macy’s department store chain, it is a bet on the durability of uS bricks-and-mortar retail at a moment in time when shopping centre owners, such as australia’s Westfield, have decided to call time.
The best reason for thinking that Jd Sports knows what it is doing is its dominant owner pentland Group, which has a 57.5pc stake. pentland is the vehicle of the Rubin family, which began as the Liverpool Shoe company. Its greatest triumph was spotting the potential of sneaker manufacturer Reebok in the 1980s just as the fitness revolution was getting under way.
There is possibly no other business in Britain which better understands the economics of sports footwear.
among the best reasons for tackling Finish Line is that it will increase Jd Sports’s influence with the key sports footwear brands nike and adidas. nike accounts for an astonishing 71pc of Finish Line sales. The connection will also be helpful following Jd Sports’ expansion into France, Spain and South Korea.
Much is made of Finish Line’s digital sales capacity, hugely critical in a changing retail environment in which amazon eats everyone’s cake. Sports footwear can be bought online, but when it comes to buying your next running shoes, as opposed to fashion nikes, there is no substitute for making sure the fit is right.
Paper tigers
GKn is not the only FTSe 100 firm fighting off a predator. europe’s biggest cardboardbox maker, dublin-based Smurfit Kappa, is being targeted by Tennessee’s International paper which has just upped its bid. Smurfit has kicked the offer back into touch.
If the Irish firm holds off, then hopefully FTSe newcomer dS Smith, king of european recycling and corrugated packaging, will not be next in the line of fire.