A journey from “labels to brands” is what Marks & Spencer chief executive Marc Bolland set out to achieve through his overhaul of the retailer’s fashion offer.
This week he courted journalists to showcase the first pilot M&S store, at London’s High Street Kensington, to demonstrate how his vision - which he announced in May - to give each sub-brand an identity has been translated to the shopfloor.
In general merchandise, which includes fashion, the changes give all the M&S sub-brands, such as Limited Collection, Per Una and Blue Harbour, their own separate areas and personalities in a move towards a department store-style concession environment.
Away from the sub-brands, its core basics offer, which will be switched from the old-fashioned Marks & Spencer labelling to M&S Man and M&S Woman, has been given its own section with improved signposting to make products easier to find.
Although the Kensington store appears noticeably different, these changes have not been made as part of a complete store refit. Bolland stresses that M&S will work within the parameters of its existing estate as it rolls out more pilot stores. “These changes have not affected the infrastructure of our stores and we have not made changes to flooring, ceilings and lighting,” he says.
That is one of the primary reasons why M&S chose the Kensington store to showcase the changes first. The M&S store that opened this week at Westfield Stratford City follows the same distinct sub-brand format but, as Bolland points out, this is not a true reflection of how the alterations will play out across the rest of the store portfolio. “It [the High Street Kensington store] is a bit more real life and we can show how we are going to replicate the changes in other places,” he adds.
The most striking changes are in the store’s visual merchandising. Each sub-brand has been given its own unique family of mannequins designed to reflect the brand’s feel and personality.
There are also anchor walls for each sub-brand that serve to create the feel of a department store concession. The till points and fitting rooms were not part of the refit, so are largely unchanged apart from the panels at the front of the till points being given the colour of the brand in that particular area.
Each sub-brand area has been equipped with certain specific fixtures and fittings unique to that brand - from large white wooden chandelier-style lights in the Per Una section to dramatic black stage lights in Limited Collection to a back wall typical of an urban loft for menswear brand North Coast.
The overhaul has provoked a mixed reaction from analysts. “I think it is moving in the right direction,” says retail analyst Nick Bubb from stockbroker Arden Partners. “But it’s not exactly radical is it? It is still the same old fixtures and the same white floors and walls, which means it still feels a little bit like a white box. I think they need to go further for the changes to really be felt.”
However, Freddie George, retail research analyst at broker Seymour Pierce, is impressed by the changes to the sub-brand areas. “I think it looked a lot better and it is quite a radical change,” he says. “It looks a lot more like a department store, and the way that they have segmented the brands and given them clearer identities works well.”
What Bubb and George do agree on is that the changes are more prominent in womenswear than in menswear. “The womenswear was better than the menswear, which just seemed a bit cramped,” says Bubb.
“We didn’t like what they had done on kidswear,” adds George. “The ranging didn’t look right. It almost seemed like a bit of an afterthought.”
George also voices concerns about the improved directional signage that has been introduced, particularly in the M&S Man and M&S Woman sections. “With the old-format stores you could see right the way down to the end of the store. Now, though, there are lots of different fixtures and signs at various heights, which mean you might not see things as clearly,” he says.
As yet, M&S has made no real changes to its lingerie, footwear or accessories offers, apart from the introduction of the new brand logos located with their respective product in each of these sections. According to Bolland, these areas will be tackled in phase two of the process. which is scheduled to begin in March.
When Bolland announced the planned changes in May he said the revamp would cost £600m in total. The total capital expenditure for phase one, with 16 revamped stores rolled out by mid-October, another 80 stores given the new format before the end of the financial year and the remainder done over the following 18 months, is estimated at between £400m and £450m, with a further £150m to £200m due to be spent in phase two. “When you consider how many stores we will be refitting in total, it is not a marginally big investment per store,” says Bolland. However, he admits the required internal rate of return on the investment is around 15%.
Bubb is doubtful this can be achieved. “To make money on it they will need some good sales uplift and I don’t think sales are going to go up even as much as 10% just because of what they have done here,” he says.
George agrees: “It probably won’t have a huge impact on sales. Sales might improve slightly but ultimately I think this will cost them more than it will actually generate.
“While it looks great and it is clear that the whole process has re-energised the management team, I am not sure it will be so well received by everyone,” he adds. “For me, one of the things about M&S is that customers can go in, go to any area and just pick anything up. Making the areas so distinct might now alienate some customers and stop them buying certain brands.”
Bolland’s big idea
- M&S’s new-format store, unveiled at High Street Kensington in London, is designed to better showcase individual brands
- A distinct section has been created for each sub-brand, including Autograph, Limited Collection and Blue Harbour
- The new format will be rolled out to a further 15 pilot stores by mid-October, including Westfield Stratford, which opened this week
- 80 stores will be given the new format before March 2012
- From March 2012 the retailer will prepare to bring in the second phase of its programme, to include accessories and multichannel