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November 24, 2017
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Source: bloomberg.com.

For the past 128 years, Marks & Spencer has been a resilient and unwavering force on the British high street. Beginning with the slogan, "Don't ask the price, it's a penny," the iconic institution has grown immensely across the globe and built itself into an enduring supplier of quality. By 1998, the distinguished brand had become the first British retailer to generate a pre-tax profit of over £1 billion (C$1.58 billion). However, the past decade has been turbulent, to say the least, for the once reliable store. 

Twiggy for M&S.
Source:marksandspencer.com.

The tempestuous years first began in 2001 when it was announced that M&S was in crisis. Profits that year were down to just £145 million and 38 European stores were to be closed. By 2004, fashion tycoon and Arcadia chief Philip Green had set his eyes on a takeover. When speaking to BBC News business editor Robert Peston in 2008, Green claimed that he had asked his team in October 2003: "Have you ever seen anything more appalling than this? We've got to buy this company; anybody could do better than this."

However, it wasn't to be and instead, Sir Stuart Rose was chosen as chief executive in the hope of reviving dwindling sales figures without having to sell-out. For a while, it worked. Concurrently, Green's looming takeover had caused M&S share prices to jump by nearly 19 per cent to 345p in May 2004, with 105 million shares changing hands. But it was short-lived. When Green withdrew his proposal in June, share prices stagnated.

Turning around Marks & Spencer fashion is like turning around an oil tanker.

In May 2008, M&S announced that, finally, profits had once again broken the £1 billion barrier. Myleene Klass was introduced on glossy new television adverts after her stint on I'm A Celebrity, Get Me Out Of Here. Meanwhile, longstanding M&S model Twiggy Lawson, who was first recruited by the company in 2005, released a 47 piece debut collection for the high street store in April 2012.

All of these promising movements should have well and truly cemented M&S' place on the struggling British high street, however, recent reports suggest otherwise. Once again, the company is making a catalogue of newspaper headlines for all of the wrong reasons. Earlier this month, M&S reported a fall in sales by 2.8 per cent in the last quarter, compared to last year. Although like-for-like food sales rose by 0.6 per cent, general merchandise was notably down by 6.8 per cent, thirteen weeks out from the end of the financial year. Not only that, for the first time, rival competitor Next beat M&S for the top spot of most valuable clothing retailer on the London Stock Exchange.

No doubt Green was rubbing his hands with delight; general merchandise was responsible for the worst quarterly figures since the Arcadia magnate had launched his most recent takeover bid. M&S' current CEO Marc Bolland, claimed that the underperformance in General Merchandise was due to a "difficult trading season." In his review of the financial markets for The Telegraph, Garry White claims, "A number of issues caused the slide [for Marks & Spencer], including wet weather and more promotions than expected, but stock shortages [on some of the best-selling collections] and merchandising issues also played a part."

Various journalists have also come up with their own, perhaps less substantive, theories; too much fashion, too little fashion and not enough editing - to name a few. However, as Lisa Armstrong notes for The Telegraph, Marks & Spencer clothing "need[s] to be more stylish […] because it comes to something when your 71-year-old mother says she finds M&S frumpy. And she's not looking for a pair of this summer's hot-pants or crop-tops."

Marks & Spencer has had more than its fair share of knocks throughout a decade-long grace period, yet has made very few visible changes to its clothing lines. It has been given innumerable chances to turn things around and yet it has repeatedly allowed its collections to gather dust with its laurels and age alongside its loyal customers.

For me, this is ultimately the crux of the problem. A brief trip to M&S will leave you wondering if there had been a violent and destructive explosion of nauseating patterns, that news broadcasters had forgotten to warn us about. On my last trip to the store, I walked past a cluster of seventy-something year old women cooing over a grotesque, long, bright pink skirt that bastardised all that is trendy about neon these days. Suddenly, it all made sense and I understood why my own Nan, whose loyalty has remained strong and steadfast throughout the years, has become so disheartened by the company. Even the younger Per Una range, which is described by Marks & Spencer as being, "feminine, sophisticated & confident," is lacking - in fact, I'd go as far to say it is stuck in a dilapidated time warp, hanging on by mere threads.

Such desperate times of design drought appear to have seen M&S drink from other thriving oceans. Rachael Taylor, an independent emerging British designer, has recently accused the company of stealing her work after it launched a clothing range that almost mirrored her easily recognisable hand drawn floral "signature design." Although the products were immediately withdrawn, the irreparable damage to M&S' brand reputation was done and Taylor wasn't the only person complaining. Criticisms from the company's shareholders include the music being too loud, long waiting lists for the bra fitting service and a confusing shop floor with recycled versions of outdated clothing - described by one woman as "garish colour combinations" and "flappy-fronted cardigans."

On the other hand, competitors such as Zara have survived - and even thrived - within the indomitable credit crunch by producing the latest runway-inspired designs on a weekly cycle. Topshop has extended its offerings by bringing on notable designers including Richard Nicoll and Mary Katrantzou. H&M has teamed up with a myriad of well-known, high-end names for limited-edition, lustrous collections, including Maison Martin Margiela, Marni, Versace, Lanvin and Anna Dello Russo.

The hard work of these high-street companies has paid off; during the past quarter, sales at H&M rose by 15 per cent to 31.7 billion kronor (C$4.62 billion) across 2,575 stores. The company that owns Zara, Inditex, recently reported annual profits of £1.6 billion across its 5,527 stores worldwide, a rise of 11 per cent from the previous year. Similarly, as John Ibbotson, co-founder of Retail Vision, told The Independent recently, "High fashion brands such as Burberry are doing very well, as are low end, cheap and cheerful brands such as Primark."

In an attempt to claw its way back to a certain level of stability, Marks & Spencer has announced that its executive director of general merchandise, Kate Bostock, will be leaving the board in October. Belinda Earl, the former chief executive of Debenhams and then Jaeger, will be joining the company as part-time style director and John Dixon, who is attributed with the success of the Simply Food brand, is set to lead general merchandise.

However, is it too little, too late? Neil Saunders, managing director at analyst firm Conlumino, told The Independent that, "Turning around Marks & Spencer fashion is like turning around an oil tanker […] when you move over into clothing, it's very staid and it's difficult to see who it is being targeted at."

M&S' new style director, Belinda Earl.
Source: standard.co.uk.

Sadly, despite spending my whole life growing up alongside the iconic brand, I can't help but agree. In such a tough financial and economic climate, having a solid reputation for quality and good value really is everything. As Benjamin Franklin once said, "It takes many good deeds to build a good reputation and only one bad one to lose it."

Marks & Spencer has had more than its fair share of knocks throughout a decade-long grace period, yet has made very few visible changes to its clothing lines. It has been given innumerable chances to turn things around and yet it has repeatedly allowed its collections to gather dust with its laurels and age alongside its loyal customers. I think it is fair to say that the clock is well and truly ticking until a takeover is announced - otherwise, it won't just be any old store being kicked off the British high street, it'll be an M&S store.

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