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Marks & Spencer to axe Portfolio in brand shake up

Marks & Spencer has confirmed it will ditch its Portfolio womenswear sub-brand and hire a team of brand managers to turn its other labels into “real brands”, as it increased its clothing market share by value across all categories by 60 basis points to 11.2%.

Under the first trading statement from chief executive Marc Bolland, the retailer said it wanted to put more emphasis on the M&S name so it becomes a “brand destination of choice in its own right”, following research which showed that customers lack clarity on the positioning of its sub-brands in clothing.

The only sub-brand to go altogether is the Portfolio womenswear range, which was launched at the start of last year targeting women aged 45 and over. In August there was speculation that Indigo Collection, M&S’s casualwear range aimed at women over 30 and Portfolio, would be likely casualties.

M&S said today: “We will deliver more clarity and remove duplication across the sub-brands by exiting Portfolio and transitioning the range to our core M&S brand.

“In addition we will improve the in-store presentation of our sub-brands, introduce dedicated brand managers in order to manage the brands individually and provide clear support and targeted marketing strategies.”

M&S said that while it believes its sub-brands are “real assets”, customers had told them that it needs to develop the sub-brands and give them more distinctive values to move them from “labels to real brands”.

Clothing sales

Total merchandise sales, which includes the performance of clothing, increased 7.2% with like-for-like sales up 6.3% for the 26 weeks to October 2.

Within general merchandise, gross margin rose 10 basis points with M&S attributing the rise to better markdown management helping to mitigate input cost pressures, such as adverse currency translation and rising commodity prices.

Key trends

M&S said its ranges remained fashionable and fresh and it interpreted the season’s key trends with items such as its Limited Collection aviator jacket. The autumn ad campaign attracted 1.8m more customers to its stores, it added.

The retailer said it offered its customers wider choice and introduced more newness through styles, fabrics and colours across all areas of clothing. It added it had increased the number of dress options available to customers by 40% and had also doubled the fabric options available in men’s casual shirts.

Customers are increasingly returning to M&S for quality that lasts, especially when choosing key investment pieces, such as suits and coats, added the retailer.

Schoolwear

The retailer said its schoolwear range remained number one in the market despite intense price competition from discounters.

Online

The company said it planned to become the UK’s leading multi-channel retailer, growing sales to between £800m to £1bn by 2013/14. It said it would build a new platform for the website and install touch-screen, web-based ordering points in stores. It plans to launch online in an unspecified international market in 2011.

International

The company said it aimed to reduce its dependency on the UK “economic cycle” and achieve international sales of between £800m and £1bn by 2013/4.

Marc Bolland: ‘Good shape’

“The business is in good shape and we have strong foundations on which to build through evolution not revolution. We will begin by focusing on the core UK business. For our customers this means that in clothing we will improve our core M&S ranges, so that the unique quality, style and fashion of the M&S brand stand out. We will also clarify the position of our sub-brands, moving them from labels to real brands.”

Results

Total adjusted profit before tax rose 16.9% to £348.6m on group sales up 5.4% to £4.57m. Total UK like-for-likes were up 4.4%.

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