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M&S to 'turbo-charge' ecommerce with third-party brands

Marks & Spencer chief executive Steve Rowe has revealed plans to add third-party clothing and home brands to its ecommerce offer and selected larger stores in a bid to widen the retailer’s appeal.

Speaking after the retailer unveiled a “£1bn battle plan” to counter the Covid-19 crisis this morning, Rowe said adding complementary labels was part of plans to “turbo-charge” M&S’s ecommerce channel.

“This about enhancing M&S and our relevance to the consumer,” he said. “We’ll add third-party brands in areas where we don’t necessarily have the expertise or dominance in the market.

“Where we do have dominance, it will be about adding one or two complementary brands to maintain that dominance. What we have no intention of doing is becoming an online department store.”

Rowe would not be drawn on any further details but said third-party brands would be added over the coming weeks and months.

Clothing and home operating profits at M&S tumbled by 37% in the year to 28 March, hit by reduced sales, sourcing headwinds, the promotional mix and the impact of the Covid-19 crisis.

M&S said athleisurewear was performing sell

M&S said athleisurewear was performing well

M&S plans to launch around 1,600 core clothing and home products on Ocado each year. It bought a half-share in the online supermarket last year for £750m. The autumn range will launch on the platform in September with around 850 products.

Rowe also outlined plans to create faster and closer sourcing links to allow the business “to compete with online pureplays”.

A faster near-sourcing supply chain will be developed to enable the test and re-order of seasonal fashion lines, particularly for the online business. The role of the sourcing offices will also be increased so that sampling, ordering, and quality issues are dealt with offshore.

To deal with excess stock levels, the retailer cancelled £100m of late summer stock, and will “hibernate around £200m of unsold seasonal stock until spring 2021”. M&S plans to permanently reduce its autumn/winter 20 store option count by 20% to shift towards faster-moving product.

Rowe stressed that M&S has taken steps to protect suppliers from the impact of cancelled orders: “We have paid for all finished garments, all garments that were on the line and all fabrics we ordered. Others might not have, but we have paid.

“What we have done is agreed new payment terms that work for both us and our suppliers. We are focused on working with a smaller and more strategic group of suppliers, and cutting back further and harder on the number of lines we run – we’ve almost jumped three years in one with that strategy.”

M&S experienced a “massive” drop in demand for clothing during the first week of lockdown from 23 March, but since then sales have slowly increased. Activewear, particularly the retailer’s Good Move range, which was launched last year, childrenswear and lingerie sales have remained strong, as have sales of home comforts such as bedding.

Rowe added that the retailer’s food business – which has been able to stay open throughout lockdown – means it is well placed to reopen its wider store estate from 1 June: “We’re well set up to reopen. One of the advantages of having had a food business open through this time is that we’ve learnt about social distancing.

“We’re in great shape to open when we get the go ahead. We’ve been working with the government throughout this time and they’ve been very helpful. The measures they’ve put in place for retailers have been significant. We’ve also been working alongside the government when it comes to the rules around reopening.”

Readers' comments (1)

  • So is M&S’s strategy to copy Next’s strategy on a two year lag? I just don’t ever see this business making strides forward rather than steps.

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