Blog: M&S prepares for a bumpy ride
Leonie Barrie | 9 January 2008
“A disappointing Christmas tale” is how one analyst described M&S’ third quarter results, while others threw the words “dreadful” and “shocking” into the mix. But why are they so surprised? Way back in November retailers were expressing their fears that the negative impact of higher energy bills and mortgage costs on take-home pay and spending power would eat into their bottom lines.
And so it has. Next has already warned of a difficult year ahead, and today M&S did the same. But the company is determined to stick to its guns, and is preparing itself for a bumpy ride.
“We are well positioned with a strong product offer and better than ever values across our business,” said CEO Sir Stuart Rose, adding that the retailer is determined not to get caught in the trap the late 1990s when it hit a trading blackspot after thinking it was immune from pricing in the market. “We were not.”
“We now have 70% of our stores in the modernised format [which makes them attractive places for beleaguered shoppers] and a strong pipeline of new space for 2008 and beyond. Direct and International continue to make good progress.”
“Would I have done anything differently,” he asked analysts today, before replying: “I don’t think so.” Which is surely the best pointer for the market that the current strategy, which has been so successful over the past nine quarters, is still the right one.
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