Kate Bostock is set to leave Marks and Spencer

Kate Bostock is set to leave Marks and Spencer

Marks & Spencer, the UK's largest clothing retailer, is shaking up its senior management team after booking a 5.1% drop in first quarter general merchandise sales. Here, Petah Marian looks at the challenges the new executives will face as they attempt to turn around its clothing division.

Marks & Spencer today (10 July) confirmed that Kate Bostock, its executive director of general merchandise, is set to leave the company after it recorded a 5.1% decline in first quarter UK general merchandise sales. On a like-for-like basis the decline was an even steeper 6.8%.

The retailer has faced ongoing difficulties in its apparel division, culminating in a series of stock issues earlier this year. It has appointed John Dixon, who is currently executive director of food, as Bostock's replacement, and Belinda Earl in the newly created role of style director.

In April, the company said it failed to buy deeply enough on its best-selling women's wear lines, and was caught out by cold weather. And today it admitted clothing sales continue to be impacted by merchandising issues in its spring/summer collections.

However, the issues faced by M&S have not been limited to stock, with bad weather, a highly promotional market, low consumer confidence and a lack of focus in its women's wear offer all hurting its performance.

Consumer focus
According to research carried out by retail consultancy Conlumino, M&S's consumer profile under-indexes among all age brackets below 50 and over-indexes among older consumers, most notably over 65. This differential is particularly sharp when looking at the main shoppers who spend most money on clothing at M&S, the study found.

"The reality is that there is often [more] product available for younger age groups; however, the way M&S displays clothing makes it very difficult for customers to identify the ranges or brands that are aimed at them," explains Conlumino managing director Neil Saunders.

"All too often the shop floor is a ‘sea of merchandise' with the customer having to do the work to find items that they like. This method of merchandising is very much out of step with the more segmented way in which many competitors present their offers and means that M&S often lacks the ‘exclusivity' or ‘excitement' of rivals."

Indeed, this is not a new issue, with former chief executive Sir Stuart Rose describing the retailer's line-up in 2009 as the "broadest church in the land" as it works to service its 21m customers each week.

"You can be eight or 80, or want to buy something at an opening price point if you're financially a bit stretched, or you can want to buy something at the top end of our ranges," he said.

Turning sub-brands into real brands
In 2010, chief executive Marc Bolland, after cutting the Portfolio sub-brand, revealed plans to improve the clothing business.

"For our customers this means that in clothing we will improve our core M&S ranges, so that the unique quality, style and fashion of the M&S brand stand out. We will also clarify the position of our sub-brands, moving them from labels to real brands."

However, the retailer's ability to service this "broad church" continues to face criticism.

Listening to today's AGM, M&S customers, mostly older women, called for the retailer to better serve them - seeking things like sleeves on dresses and tops as well as a renewed focus on the fashionability of the Per Una line.

However, the retailer remains largely committed to its strategy around sub-brands, with Bolland telling journalists today that he is "very happy" with the brands and that they have "delivered well for us".

New store formats
Yet, until now, the company seemed to hope the roll-out of its new store format would largely do the work of differentiating the brands.

Even today, Bolland emphasised the "Concept 11" store format has been introduced to 15% of its stores, with the new design set to reach 80-90% of its UK estate over the next 12 months.

New management
However, the retailer's management now seems to recognise this will not be enoguh to turnaround the struggling general merchandise division. Bolland emphasised that Bostock's departure was by "mutual consent" and that they had been working on this for a "couple of months".

He said she has "been with the company for eight years" and "wants to do something different", but also that "we wanted something different".

Speaking about the new appointments, he described former Debenhams, Jaeger and Aquascutum CEO Belinda Earl as having the "best in class style credentials of anyone in the country".

From September, Earl will be working for the company for two to three days a week with a pure focus on product - which Bolland was keen to stress is "actually a very large amount of dedicated time to look at ranges".

Speaking about the appointments, Conlumino's Saunders said: "To date, the company has taken small steps aimed at making it more competitive and interesting; our feeling is that it needs to be much bolder, to the extent that it almost needs to ‘rip up the rulebook' of the past and completely redesign its proposition to suit new and emerging market conditions."

Perhaps the new appointments will be the bold change M&S needs.