Blog: Leonie BarrieOn your Marks…

Leonie Barrie | 26 May 2004

British retailer Marks & Spencer is in the headlines again – and for all the wrong reasons. The company yesterday admitted that its clothing sales and market share have failed to meet expectations, and that further losses are likely in the first half of the current financial year. It seems it can do nothing right as it struggles to find a new formula for recovery. Prices are being reduced by an average 3 per cent this autumn; but its rivals like Next are going for even bigger cuts. And a planned overhaul of its supply chain, aimed at slashing the 18 weeks to get the majority of its clothing from the factory to the shop floor, looks like being a long and laborious process.

With retailers like Zara setting the pace from design to delivery in as little as two weeks, M&S’s supply chain seems archaic in comparison. In a trial to reduce delivery times, M&S proposes to dump just one of the 90 supplier warehouses that hold goods before they get to its own distribution centres. The retailer also plans to buy about 7.5 per cent of its clothing direct from factories.

Research published by Verdict earlier this week says sales growth at smaller retailers is outstripping their larger counterparts. Strength of brand and focus are highlighted as the key reasons for this trend. M&S should take note.


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