Blog: M&S battens down the hatches
Leonie Barrie | 2 October 2008
Just like its customers, Marks & Spencer is battening down the hatches and hoping to ride out the downturn.
The retailer, which posted second-quarter trading figures today, said it plans to cut capital spending by up to GBP200m (US$352m) – that’s down to GBP700m this year and GBP400m in the 2009-2010 financial year – slashing its unpopular store modernisation programme and focusing instead on improving its supply chain and information technology systems.
Even though its cash-strapped middle-market shoppers continue to trade down to discount alternatives or buying fewer items, M&S results were broadly in line with expectations.
Second quarter like-for-like sales in the UK were down 6.1%, and like-for-like general merchandise sales, which includes clothing, fell 6.4%. Most recent trading, in the 13 weeks to 27 September, saw clothing sales down 3.5%. Perhaps most importantly, management maintained its full-year dividend.
That said, profit margins are coming under pressure via increased price-cutting, with UK gross margins expected to fall 100 basis points this financial year.
But in the run-up to what’s likely to be the worst Christmas for at least 30 years – and as a measure of just how tough the markets have now become – if the retailer can get away without any more downgrades for the full year it will be off the hook... at least for the time being.
Confirmation that digital supply chains are top of mind for apparel industry executives came last week with the latest plans from global sourcing specialist Li & Fung....
As a barometer of the issues top of mind for apparel sourcing executives, it is hard to beat the annual Prime Source Forum in Hong Kong. ...
Over the past month, Donald Trump and his team failed to offer any clear plan to ensure Americans would "Buy American, Hire American" - while the British government's attempts to clarify the specifics...
The Bangladesh government was forced to respond late last week to pressure over its crackdown on labour activists after a number of global brands and retailers, including H&M and Inditex announced pla...
- Why collaboration is key to fashion supply chains
- Rana Plaza four years on – Timeline of change
- Industry groups reaffirm commitment to Bangladesh
- Using worker surveys to drive supply chain change
- Trump and Brexit get a dose of pragmatism
- Adidas to digitalise Speedfactory concept
- M&S extends sourcing deal with Lindsey brothers
- US Q1 in brief – Columbia Sportswear, Amazon
- Brandix rolls out Tukatech systems
- Nike filed patent for "reinforced denim"
- Global market review of denim and jeanswear – forecasts to 2022
- When Things Go Wrong - A Practical Guide to Managing Common Problems in Apparel Sourcing
- Clothing Market in the Top 5 American Countries to 2021 - Market Size, Development, and Forecasts
- Outdoor performance apparel 2016: A broader perspective
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar