M&S: What went wrong - and what comes next?
- Credit: Archant
This is no ordinary problem. This is a £201m loss making M&S problem. Caroline Culot reports on how the British retail grand-dame has been brought to her knees.
A fresh-faced Holly Willoughby smiles out from M&S fashion ads with the rather fitting tag line: Time for a refresh.
Indeed, it is time not just for a refresh, but a rethink on how one of the country's biggest retailers - which runs shops in Norwich, King's Lynn and Lowestoft - moves forward amid a raft of closures.
Earlier this week M&S announced it needs to close a further 30 shops, after already shutting 59 main stores and axing 7,000 jobs. This came after a pre-tax loss of £201.2m in the 52 weeks to March, down from a £67.2m profit the previous year.
What's gone wrong? Well, we the public have known all along haven't we? The food offering remains great - food sales have risen by 7pc thanks to the Ocado tie-up.
However, M&S clothing and some of its homeware, which takes up huge amounts of store space, leaves much to be desired for many shoppers. And it's not profitable.
You've only got to understand that Boohoo is now worth more than M&S to see where the problem lies. While other fashion brands have taken off online, M&S has stood still.
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Gone are those days back in 2001 when shoppers would await the new collection in the Per Una range, a hugely successful collaboration with Next founder George Davies.
Professor Joshua Bamfield, director of the Centre of Retail Research in Norwich, said the store's recent woes are a result of Covid not just closing down its stores, but changing people's shopping habits.
"Sales in fashion and clothing, even including items for babies, have fallen by 45pc over the past year because of Covid," he said. "People just aren't buying new clothes like they used to, they're wearing say, last year's winter coat. They wear tracksuits.
"Sadly, M&S is just stuck in the middle, it's not supercool and unable to make up its mind who its customer is - and therefore has managed to alienate its traditional customer.
"But it will survive because its food offering is excellent, it's also now getting on with sorting out its problems, taking account of itself, and with Debenhams and Arcadia's stores gone from the high street, there is a gap in the market for them.
"What they need to do is become specialists in a type of clothing, perhaps outdoor wear. They are doing what they need to - consolidate and become smaller."
Former M&S manager Paul Rich, from Norfolk, who worked in retail for 37 years, including overseeing 100 staff at the retailer's flagship store in Marble Arch, London, said he wasn't surprised at its problems.
"M&S finds itself in a difficult position because it still has 255 full line stores, and with the move to online shopping, accelerated by Covid, are people going to come back to the high street?
"M&S finds itself with an awful lot of square footage of clothing and homeware space and is that business going to return? That's the million dollar question for every retail CEO - what will the next 12 months bring?"
Chris Bowler, 81, a former loyal M&S shopper for clothes, said: "For a good part of my adult life I loved shopping at M&S. In the autumn I could find that perfect suit for work or a warm woollen coat in the winter followed by dresses in the spring and summer. These were pretty but elegant and made with a good fabric.
"Not anymore! After lockdown ended I went into my nearest M&S store with a modicum of excitement. I really wanted to buy something after months of abstinence. However, I scoured the store in vain and came out empty handed. If I found a dress that I liked the style of it was too short for most people in my age group. If I found a garment in a fabric that I liked, the design was often way over the top.
"With good intentions I think M&S had the idea of trying to please everyone but they have ended up pleasing very few people."
Mr Rich has managed some of the biggest M&S stores, including King's Lynn, Peterborough and Lowestoft as well as being in charge of the menswear section of its biggest, Marble Arch in London. He decided to leave the business last year to take up a new job in gardening.
"Here lies the challenge - M&S has a got a very buoyant food business, very innovative, very market-leading and the customer demographic who shop in that are very much younger than those who shop in the clothing and home part of the business," he said.
"How do they convert that customer who shops in their food hall to come and re-evaluate the clothing and home product which over the years has gone back and not had the style credentials it needed?
"Selling other brands will attract and give people a chance to re-evaluate M&S' own products once inside the store, but you make less profit as there is less margin. They do need to thin out their store portfolio.
"M&S need to get its website fit for purpose, that's the next thing they need to address. It's a high street icon, a national icon and a strong moral force. I hope it can come through its toughest 12 months ever."