In the money: Speed pressures shift M&S supply base
The UK's largest clothing retailer, Marks & Spencer is seeing its clothing supply base shift away from the Far East as it looks to increase speed to market after facing a series of replenishment issues earlier this year.
The company is increasing the amount of clothing it sources from India, Bangladesh and Sri Lanka to help mitigate higher wage and input costs in China and improve turnaround times.
Speaking to just-style yesterday (7 November), the company's financial director Alan Stewart said the shift was due to a "mixture of speed of delivery, cost of production and the ease of getting product out of certain countries".
However, he emphasised that M&S likes to work in "partnership" with suppliers and build relationships that last longer than one season.
"It's a constant dialogue, they face pressures, we face pressures, and we come to the right answer," he said.
The retailer has seen the volume of products sourced from the Far East, which includes China, decline to 44% of clothing over the first half of this year from 51% in the same period last year. South East Asia, which includes Bangladesh, Sri Lanka and India, has picked up the majority of the shift, rising to 44% of products from 37% a year ago.
Recently appointed general merchandise director John Dixon also told just-style he has spent the first month in the role speaking to customers to better understand their needs.
One of his projects will be to look at the supply base, with a "complete end-to-end review". He explained speed to market will be one of the key elements of that review - including looking at faster ways to get product into stores once they reach the UK.
In April, the company admitted that it had failed to buy deeply enough on its best selling lines, leading to sales declines in the fourth quarter of last year and the first quarter of this one. It said the issues were exacerbated by the long lead times associated with sourcing knitwear and outerwear from the Far East.
In response, chief executive Marc Bolland said the company has bought five times more of its advertised lines than last year. He added this has helped lift sales of these products threefold over the first four weeks of their launch, and meant it still had availability on these lines after four weeks.
Much of the discussion around the retailer's fortunes in recent quarters has been about speeding up the time products take to get to market and becoming more trend-led, yet Bolland was emphatic this does not mean that M&S is becoming a "fast fashion" retailer.
"What Zara does is fast fashion trying to copy what is happening on the catwalk at a quality level that is different than ours. What we have is completely different. We like to be on-trend, with a very good quality. It's a different position. Have we been backing the trends sufficiently in the past? Probably not," he said.
"Yes we are certainly looking at trends, but we are certainly not going to become a trendy business, let's not forget that we never forget the core customer. She wants to be seen in something that is not away from the trends, if you want something that has a certain style that's what we can do."
Yesterday, M&S saw its first half pre-tax profit fall 9.7% to GBP289.5m. Over the 26 weeks ended 29 September, group sales increased 0.9% to GBP4.7bn. General merchandise sales fell 5.1% over the half, hit by merchandising issues over the first quarter. Second quarter general merchandise sales were up 0.1%.
Bolland also set out his priorities for the new general merchandise team, which was completed on Monday with the appointment of Frances Russell as women's wear director, and Janie Schaffer as director of lingerie and beauty products.
He said the retailer will focus its clothing efforts on style, trends and best-in-class quality; good value; real choice - not proliferation; and on developing the instore and online shopping experience by better aligning buying with merchandising in-store.
It will take some time for industry watchers to see the results of these appointments, with their first collection in stores in July next year.
Despite the global recession, e-commerce continues to buoy the bottom line for successful retailers....
Omni-channel services may be delivering, but they can be complex. The goal is delivering a seamless omni-channel experience for apparel buying consumers and if the tech doesn't work, the sales aren't ...
Actions need to speak louder than words when it comes to tackling working conditions in the Bangladesh garment industry. And in the wake of the collapse last week of the Rana Plaza building near Dhaka...
President Obama has nominated Chicago businesswoman Penny Pritzker as his new Secretary of Commerce, and advisor Mike Froman as the new US Trade Representative....
Nearly three-quarters of all fake products seized last year in the US were apparel, footwear, handbags and accessories, according to a new report by the US Trade Representative....
- Speed to market key to Adidas 2020 growth plan
- GAFTI gears up for change in apparel auditing
- SuperGroup to adapt sourcing model for speed
- Apparel software trends 2015: What else to watch?
- Fast Retailing ramps up sustainability efforts
- Transparency call for German apparel firms
- Strike at Adidas and Nike shoe factory in Vietnam
- Myanmar garments to benefit from export strategy
- H&M and Kering trial recycling technology
- Lululemon Athletica on “strong growth” track
- Global market review of workwear - forecasts to 2019
- Myanmar's Garment Sector - Opportunities & Challenges in 2015
- Management briefing: Outlook 2015: Apparel industry issues in the year ahead
- Outdoor performance apparel: peaks, valleys, and green fields
- Apparel Retail: Top 5 Emerging Markets Industry Guide