Viewpoint: M&S adrift despite a decade of turnaround talk
Like a vast, slow-moving and rather unwieldy tanker, battered and lashed by stormy seas, the UK's largest clothing retailer Marks & Spencer has done much over the past decade to try to steady its business.
But in the 13 years since it became the first UK retailer to hit the GBP1bn profit mark, only once, in 2008, has it managed to break through this magic barrier for a second time. Back in 2002, full-year profit before tax was GBP721.3m; fast-forward to 2012 and it is languishing at GBP705.9m.
More often than not, its financial updates have been littered with talk of "weakening market conditions", "making progress" and "turning the corner".
But despite its efforts, the company continues to suffer - and most worryingly, so do the problems in its clothing operations.
Results released this week show first quarter performance was the worst in three years, with like-for-like general merchandise sales (90% of which is clothing, the rest footwear and home products) tumbling 6.8% in the three months to 30 June. Women's wear, for which no individual figures are available, is believed to have done even worse than this.
And last month, M&S was overtaken by Next as the most valuable clothing retailer on the London Stock Exchange.
The list of excuses is long, and includes poor buying decisions like the under-stocking of key lines; unseasonal weather conditions which have dampened sales of summer women's wear; and a highly promotional market as rival retailers struggle to shift unsold stock.
While some of these are of M&S's own making, most are not.
And with rival retailers like Debenhams managing to book a 3.1% rise in sales at stores open over a year in the 16 weeks to 2 June, and online fashion seller Asos posting a 31% surge in retail sales in the three months to the end of June, it's no wonder the firm's shareholders are frustrated at M&S's seeming inability to navigate through tough and volatile economic environments.
A decade of change
The truth of the matter is that Marks & Spencer lost its way a long time ago, and a succession of new executives, store refurbishments, updated clothing ranges, and multi-million pound advertising and marketing campaigns have failed to yield consistent improvements to its performance.
Yes there have been years when signs of an uptick appeared - most notably between 2005 and 2007 after the retailer rebuffed a GBP9.1bn takeover bid by Arcadia owner and retail entrepreneur Sir Philip Green. But these lifts have tended to be short-lived, followed closely by a new raft of efforts to try to lure back shoppers, shake off M&S's tired image, and turn the company around.
Chief executives have come and gone: think Peter Salsbury, Luc Vandevelde, Roger Holmes, Stuart Rose and current incumbent Marc Bolland.
And as the UK clothing market has polarised, with better branded offers at one end and discounters or more nimble rivals at the other, M&S has continued to flounder somewhere in the middle.
Efforts to shorten lead times have only recently helped M&S introduce a six-week turnaround on fast-selling lines, which is still three times as long as the likes of Zara. And attempts to woo younger customers have alienated those at the other end of the age spectrum, and new sub-brands launched to appeal to specific age groups have simply muddied the water.
Indeed, Autograph, Classic, Indigo Collection, Limited Collection, M&S Woman, Per Una, Twiggy for M&S Woman, Angel First Lingerie, Collette Dinnigan, Blue Harbour, Collezione, M&S Man, North Coast and Savile Row Inspired are just some of the lines that currently grace its stores.
The retailer's international direction has also veered from one extreme to another. In 2001 M&S began shuttering stores in Belgium, Luxembourg, the Netherlands, Germany, France and Spain as it pulled out of Europe. But in 2007, overseas expansion began again - and is now being hailed as one of the cornerstones of its current growth strategy, along with its digital efforts.
Among the biggest concerns is that while efforts to make the retailer and its wares more compelling have had little impact in its domestic market, this pales against the challenge of upping its game to succeed on a global stage.
Meanwhile, M&S's promotional strategy and product mix continue to head towards lower price points, with near-constant offers systematically eroding the brand.
Carving out a clear niche?
The departure of Kate Bostock, the executive director for general merchandise, announced this week paves the way for new blood, including the move into her shoes by food chief John Dixon, and the appointment of Belinda Earl as style director.
But these changes won't take place until October - so it'll be spring/summer 2013 when their impact is first seen in product coming into the stores.
With the retailer seemingly lurching from one mis-step to another as it tries to navigate a tough retail environment, it's little wonder the market - and shoppers - feel a sense of frustration at its lack of progress.
The UK's largest clothing retailer still holds more than 11% of the British clothing and footwear market, and retains a place in the nation's affections. But it continues to struggle to carve out a clear niche on the high street. Until it has the confidence to chart its own course, the likelihood is that M&S will continue to flounder.
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