Marc Bolland and his chief financial officer Alan Stewart began by saying all the right things about how they planned to improve the performance of Marks & Spencer’s general merchandise division, which is largely made up of clothing.
At yesterday’s press conference to address M&S’s full year results, Bolland insisted that success was “all about product”, pointing out that M&S’s position is now clear: it stands for quality and style. He also said that availability is important and used Limited Collection as an example: M&S’s most trend-led collection will go into most stores (some 190 of them), highlighting the emphasis on getting “product down the chain”.
In addition, at last week’s autumn 14 preview, M&S said the number of styles had been cut back by 10% and that 50% of what was shown at the press event would go into all stores.
Crucially, Bolland and Stewart also said yesterday that fewer promotions would play an important part in meeting their gross margin guidance for general merchandise.
So, a tighter collection underpinned by quality, better distribution throughout its store network and fewer markdowns. So far so good.
But it was when the duo were pushed on discounting that the strategy began to look less solid.
Part of M&S’s problem in turning around its clothing business over the last three years has been its brand positioning. By upping the quality of its clothing and through its marketing campaigns, which feature “leading ladies” - women who are supposed to stand for intelligence, wit, charm - M&S is clearly trying to say something about its own market positioning. The M&S customer is discerning, cares about quality and wants to look good. Value for money, not price, is important to them.
But all that comes apart when they walk into a store or go online and see that some of M&S’s prized products are on Sale, at a time when they shouldn’t be (such as cashmere jumpers in the run-up to Christmas). M&S needs to back-up the position it is trying to create for itself in the market with confidence in the product they are selling in stores.
So when asked yesterday if M&S would stand by this strategy of fewer promotions if they felt pressure from the rest of market - the reason that drove M&S to discount fairly heavily last year - Bolland deflected the question to Stewart. But Stewart, clearly well-versed in PR nonsense, provided no answer that made any sense.
When pushed, he kept referring to the fact that fewer markdowns “only” make up 20 basis points of the 100 they are planning to grow by for the 2014/15 financial year. If it’s “only” 20 basis points, if this is so insignificant, why make it part of your strategy?
Finally Bolland did admit that “we live in a market environment”, suggesting that they will not stick to their guns if they feel the pressure. Stewart tried to salvage this by saying that the product strategy on quality and availability will “drive full price” sales.
Whilst there is still work to be done by M&S across its clothing division (I haven’t even touched on the new website) ensuring that it backs up its strategy of quality when it comes to pricing is vital. No customer is going to believe that a discounted cashmere jumper in early December stands for style and quality. Not if M&S doesn’t believe in it.