Marks & Spencer needs to be “more commercial, agile and faster” in order to successfully turnaround the business, new chairman Archie Norman has said.
Speaking after the retailer announced a drop in half year profits and like-for-like clothing and home sales Norman said there were “challenges ahead” and the retailer is now focused on accelerating its pace of change.
“I’m conscious that I’m not the first chair to tackle transformation at M&S,” he admitted.
“The business has been drifting and has been underfilling its promise to consumers for more than 15 years, it’s a long time since its heyday.
“The reason we haven’t been hitting the mark is not because of the people in charge but because we haven’t been able to deliver the pace of change needed. Now is the moment to start doing it.”
Norman said the business has been honest about its shortcomings and what changes need to be made: “The genesis of any turnaround starts with the recognition of unvarnished truth. The reason the business hasn’t succeeded [in turning around] comes from an inability to admit there is failure. We are putting it on the table, there are challenges ahead and we recognise the need to be more commercial, faster and agile.”
He added: “Our objective is to create a profitable, sustainable business and we are inviting the people who work in the business to join us in tackling the issues.”
Chief executive Steve Rowe echoed this sentiment: “Twenty years ago we were one of the world’s leading retailers, I believe we can make M&S special again. When we get it right we are unbeatable, but we need to move faster to keep up, we can’t rest on our laurels.”
Rowe said that over the last 18 months “good progress” had been made in the clothing and home division as he and the M&S team “put out fires”.
Clothing lines have been reduced by 10%, 2,500 prices have been lowered and promotions have been reduced from nine per year to four.
The retailer said it was currently in the first phase of a five year plan. Step one is getting the basics right and reducing costs, step two is becoming a digital first retailer and developing stores of the future and step three is moving a third of sales online and generating a more personal customer journey by using data.
“In order to compete with competitors and deliver sustainable growth we need to tackle legacy costs and build a supply chain that’s fit for purpose,” said Rowe.
“We need to continue the process we have started and accelerate that change.”
On Christmas trading, Rowe said the shopping rush is getting “later every year”: ”The half term holidays fell a bit later this year which hasn’t helped, but all of our top searches online have been for Christmas - shoppers are starting to research. The early reaction to our Christmas ranges has been good but the market is fragile at the moment and the customer is volatile.”
Rowe also confirmed the retailer would not take part in Black Friday this year: ”We did it three years ago and it sucked business [from us] for the following few weeks. Our shoppers want to trust our prices, they want to know we won’t change them the following week after they buy. It’s the right thing to do.”