The bear truth
M&S is “small” firm that’s drifted, says chairman
MARKS & Spencer has been “drifting” for at least 15 years, the store chain’s new chairman has declared.
Archie Norman said the high street firm had failed to take tough decisions for too long.
And he admitted bluntly: “We are quite small so let’s think like someone who is quite small.”
But Norman backed boss Steve Rowe’s bid to revive the firm over the past 18 months.
He said: “He has bought us a ticket for the next stage.”
No-nonsense Norman helped turn around Asda’s fortunes in the 1990s and he has also led ITV.
And he didn’t pull any punches about M&S’s recent past performance.
“This is a business that has been drifting for not five years, not 10 years but 15 years and beyond,” he said.
“Our priority is to create a profitable, sustainable business that lives up to the brand. There will be some hard yards ahead.”
Norman added: “This is a business that people want to win.”
Rowe insisted: “We are in step one of the transformation programme.”
He said M&S, which has launched a Paddington Bear-themed Christmas advert, still had a strong brand, loyal customer base and leading market shares in categories such as lingerie and ready meals.
The chief executive yesterday announced plans to speed up a branch shake-up. The firm had previously earmarked the closure of 30 clothing and homewares stores during the next five years, with another 87 either being turned into Simply Food branches or moved.
Rowe now says that’s the
Our priority is to create a profitable business that lives up to the brand
“minimum” and the shake-up would be “front ended”.
It is also scaling back the opening of Simply Food stores after rising costs from the weak pound dented profit margins.
But Rowe vowed to improve M&S’s food ranges by stocking products and pack sizes that appealed to families doing their weekly shopping trip.
Food sales grew 4.4% to £2.8billion in the six months to the end of September thanks to the opening of 24 Simply Food stores, but likefor-like sales fell 0.1% in shops open at least a year.
Clothing and homeware sales were flat at £1.7bn, but fell 0.7% on a like-for-like basis. Profits fell 5.3% to £219m. Ex-Halfords boss Jill McDonald has been tasked with boosting M&S’s clothing arm. Elsewhere, finance chief Helen Weir announced she was quitting the firm this week.