Marks & Spencer will launch a casualwear sub-brand called Indigo aimed at the over-45 womenswear market this autumn.
M&S confirmed the launch at its full year results presentation this morning and said the introduction of Indigo had come off the back of the success of its Portfolio formal range, geared towards the over-45 womenswear market. It launched Portfolio last season.
“”It is difficult to get the run rate but we are cautiously optimistic.””
Sir Stuart Rose, executive chairman, Marks & Spencer
M&S executive chairman Sir Stuart Rose said: “We launched Portfolio as a direct result of market research and we are pretty pleased with its performance and we’ll launch a casual version of this called Indigo later in the year.”
Rose said that M&S working hard to drive more excitement and improve choice across the ranges but said the business was looking to reduce options by up to 20% by the back end of this year. Options have already been reduced by around 8%.
He added that M&S had seen the biggest bounce back in clothing market share for 11 years in the last 12 weeks.
M&S said it expected to see margin eroded by between 125-175 basis points in the new financial year. This will be split roughly evenly between general merchandise and food. Finance and operations director Ian Dyson said that the weakness of sterling resulted in margin exposure of between 400 and 500 basis points, at an weighed average hedging rate of £1 to Story text.68.
However Dyson said that average selling price was likely to rise by between 2% and 3% but that this would filter through partly through product mix.
He said there was also more opportunity to better manage markdowns and promotions this year and that M&S had already begun work with its suppliers to reduce supply chain costs and commodity prices.
Rose said there would be consolidation of the supply base this year and added: “We’ve started price auctions on sales of fabrics, which reduced input price by about 10%. We had 10 types of jsery in womenswear. We have reduced that to three.”
“Whatever we do on cost reuctions and efficiencies, the key words remain innovation, quality, styling and the right product in the right place.”
Sir Stuart Rose on consumer confidence
Separately Rose said that there was some evidence that consumer confidence was recovering and added that the outlook for this year was more stable. “It is difficult to get the run rate but we are cautiously optimistic,” he said.
“The good news is that it hasn’t got any worse. We are being cautious. Weather is not like for like and Easter is not like of like, nothing is like for like, but there’ more stability on the sales line. Confidence is recovering. At the end of 2007 it fell off a cliff. The recovery from the end of last year seems to be sustained.”
Rose added: “M&S customers are a bit older and wiser and in the last recessions there’s evidence that M&S went into the recession earlier but came out of it earlier. But these are the very, very early signs.”
“There is a push/pull from customers. There is a pull from customers wanting to be less gloomy but there is also a push because of the likelihood of more unemployment.”