Comment: by Terry Murden
How to put the sparkle back into M&S
For the City it seemed there was only one story in town last week. Former Unilever executive Dave Lewis, propelled into the hottest seat in retail last summer, was unveiling his plans to turnaround Tesco. It had the potential to immediately make or break the new chief executive. As things turned out, he delivered a shopping trolley full of goodies that pushed the shares to the top of the FTSE100, giving Tesco its best one-day performance for 26 years.
While investors were celebrating the supermarket chain’s imminent revival, another giant of the retailing firmament was suffering a Christmas hangover. Marks & Spencer reported a record year in its popular food offering with a 17% surge in Christmas week sales.
But that was as good as it got. General merchandise, the division that includes its key womenswear ranges, continues to unravel and in the last quarter sales fell another 5.8%.
It was the 14th consecutive quarterly fall and for many M&S watchers, that is long enough for the company to have found the solution. Almost four years is longer than the average survival rate for a chief executive and once again questions are being asked about how much more time Mr Bolland will be given to turn things around.
So what should he do put the magic & sparkle back into one of Britain’s favourite high street chains?
M&S still makes lots of money and in some divisions it leads the way, not least in food in which it is innovative and driven by top quality produce and choice.
Food aside, the company continues to have a number of issues. There were well-publicised problems with delays to online orders, including difficulties at a distribution centre in the Midlands. But other problems are more deep-seated, including its insistence on trying to penetrate a young, fashionable market that prefers to shop at Next, Zara and Ted Baker. Where John Lewis sells top fashion labels, M&S has tried to compete by inventing its own and with mixed results.
The ranges try to appeal to shoppers from 15 to 75. This lack of focus and a mish-mash of brands leaves it exposed when its rivals have a clearer offering.
M&S once reigned the high street practically unchallenged and has struggled to cope with those chains that have emerged over the last 20 years or more and grabbed younger customers who are in danger of never visiting an M&S store.
For years the complaint has been that while it has attempted to lure back young consumers, it has neglected its core customer, the mature adult who is more interested in the essentials than the fashion items and accessories.
This is not to say some of the modern ranges are not performing well. Since introducing more stylists to his top team, Bolland has been able to improve much of the offering and its autumn collection in 2013 was particularly well received. They have proved popular with the older person who still wants to look good without trying to look twenty years younger.
Unfortunately, unseasonable weather has been a problem, leaving stock unsold. This is not something Mr Bolland or any other retail leader can control. However, he can take the blame for too much change and too much innovation. Some things just don’t work, and a failure to provide what the customer wants is a costly one.
What he might consider is trying to repeat the success of the food business. The M&S Simply Food chain works. Why not open a separate chain of clothing stores focused on top quality fashion outwith the main outlets? If a key problem is the resistance of the young and fashionable to M&S branding, then why not launch these stores under a new brand?
It may be a way of taking on Next, H&M and others that will otherwise continue to soak up market share.
He says in an interview with MailOnline that the company is united and that the strategy will come good. M&S, he says, will focus more on healthy eating in its food range. He forgets to mention that M&S focuses on healthy eating every January as a response to the Christmas binge.
So, nothing new there Mr Bolland. Yes, you’ve chopped and changed a lot, but maybe it really is time to strip out those bits of the business that would work better if they were run at arm’s length.