Blog: Leonie BarrieA 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.

 


BLOG

VF Corp splitting into two companies

Last week started with news that US apparel giant VF Corp is to spin off the group's denim and outlet businesses into an independent, publicly traded company – in a move that will enable it to focus o...

BLOG

Hong Kong sustainability scoop

We led on just-style last week with a world exclusive scoop on a number of new projects being unveiled in Hong Kong next month – including the first mill being set up in the territory in more than hal...

BLOG

Spotlight on Central America sourcing

A worsening political and social crisis in Nicaragua is having a spillover effect in Central America, where the spectre of rising violence in Guatemala and El Salvador is threatening to undermine appa...

BLOG

Trump trade war may hit garment prices

With US president Donald Trump now threatening to impose tariffs on all US$500bn of goods imported from China, the upcoming trade war will undoubtedly hit garments. But replacing China means replacing...

just-style homepage



Forgot your password?