Blog: A penny for your thoughts, Sir Stuart
Leonie Barrie | 15 May 2009
One day after Marks & Spencer kicked off its 125th anniversary celebrations with plans to sell selected products for just 1p, an analyst has warned the retailer its discounting and cost cutting “is threatening the long term health of the business.”
M&S’s “penny bazaar bonanza” will offer 20 products to consumers, including knickers, socks, ties, purses and cufflinks at 300 M&S stores in the UK from next Wednesday (20 May).
“It’s been a tough year for us all but people are fed up with being fed up and we wanted to give our customers a real treat,” said M&S chairman, Sir Stuart Rose.
But it seems analysts at broker Investec are also fed up with the way M&S management is running the firm.
They slam its “discounting to protect market share, and cost-cutting to protect the dividend,” and that rather than trying to compete with the likes of Primark and Tesco it should focus on quality instead.
The analysts also want to see a dividend cut, a focus on the main M&S store format, more out of town stores, a decision on who will be the next chief executive and a halt to overseas expansion.
Quite what Sir Stuart thinks of all this remains to be seen – although he’ll get a chance to air his thoughts when the retailer reveals its full-year results next week. And I’m sure they’ll be worth more than a penny.
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