• First-half pre-tax profit up 13.7% to GBP348.6m
  • Sales rose 5.4% to GBP4.57bn
  • UK like-for-like sales up 4.4%
M&S CEO Marc Bolland

M&S CEO Marc Bolland

The new chief executive of retailer Marks and Spencer today (9 November) outlined his long-awaited strategy for the business, including plans to expand its clothing stores in the UK and overhaul its fashion brands to make it easier for customers to shop in its stores.

There will also be changes on the supply side too, with M&S continuing to reduce its dependency on full service vendor suppliers (FSV), which pass ownership of stock to the retailer when it moves into warehouses or stores.

"By 2015 we will aim to have a supply base comprising 35% FSV suppliers and 65% direct," CEO Marc Bolland said, adding that the move will "give us greater control of our supply chain."

Six months after taking up the role, Bolland believes: "The business is in good shape and we have strong foundations on which to build through evolution not revolution.

"We will begin by focusing on the core UK 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."

The retailer also intends to build its multi-channel and international capability over the next three years, as part of moves to turn it into an international multi-channel retailer and make the M&S brand more accessible to more customers around the world.

The plans involve investing GBP850-900m (US$1.3-1.4bn) in overhauling the UK operations, including an increase its floorspace and a redesign of existing outlets, with the aim of increasing revenue by GBP1.5bn by 2013/14.

Globally, the retailer is now targeting GBP100m to GBP1bn in international sales by 2013/14, with plans to "become a more international retailer" and reduce its dependency on the UK.

While there was no confirmation of plans to return to Western Europe, M&S said that instead of "planting flags" it aims to build a "leadership position in priority markets" such as Turkey and the Czech Republic.

The new focus was unveiled as the company booked a 13.7% rise in first-half pre-tax profit of GBP348.6m (US$562.1m), up from GBP306.7m in the same period last year. Sales rose 5.4% to GBP4.57bn, with UK revenues climbing 5.6% and international sales up 3.8%.

UK like-for-like sales in the 26 weeks to 2 October grew by 4.4%, with general merchandise - which includes clothing, footwear and home furnishings - up 6.3%.

Highlights during the six months included a 60bps rise in clothing market share to 11.2% according to Kantar Worldpanel Clothing, with "growth across all areas," and continued improvement in customer price perceptions in clothing.

Click here for more details on Bolland's plans for M&S.