The rise in profitability can be attributed to a combination of a reduction in capital expenditure, increased sourcing efficiencies and a shift away from perpetual discounts. Simply put, M&S is finally buying for less and selling for more.
On Marks & Spencer’s FY results, Natalie Berg, Director, Retail Insights at Planet Retail, commented:
“The rise in profitability can be attributed to a combination of a reduction in capital expenditure, increased sourcing efficiencies and a shift away from perpetual discounts. Simply put, M&S is finally buying for less and selling for more.
“Let’s not forget that Marc Bolland, despite having had very big shoes to fill when taking over five years ago, inherited a host of legacy issues. He has brought one of Britain’s most iconic brands into the 21st century, putting in place vital new infrastructure, ultimately making M&S a more agile and digitally-aware retailer.
“Granted, it hasn’t been the smoothest of transformations and more work remains to be done, but today’s announcement will have certainly bought Bolland more time in the boardroom.
“We remain cautious about a sustained recovery in womenswear. On a positive note, M&S appears to be finally providing its core 55+ shoppers the style, quality and price points they demand. Equally important is the fact that recent supply chain enhancements have enabled M&S to improve stock availability, quickly replenishing those top-selling items.
“That said, they are not and never will be a fast fashion company. One of the reasons retailers like Next and Asos are so profoundly successful is because they have a very clearly defined target market. M&S, meanwhile, continues to chase younger shoppers while attempting to stay relevant to their core mature customer. The new Limited London capsule collection debuts next month, but do M&S shoppers really want cropped t-shirts and skinny denim dungarees?
“In today’s crowded market, retailers can no longer be all things to all people. As we have seen with M&S’ own food business, retailers today must have a distinct, targeted proposition in order to stand out among their peers.”
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Natalie is available for further comment and can be contacted on +44 (0)20 7715 6380 or via e-mail at email@example.com
Georgia Gaydon, Editorial Assistant
Tel: +44 (0)20 7715 6403; E-mail: firstname.lastname@example.org