Marks & Spencer Group Plc (MKS), the 129-year-old British fashion retailer, is counting on shoppers like Lady Miloska Nott to reverse two years of declining profits.
The brand’s new fall lineup “certainly looks a bit better and the quality has improved,” said 78-year-old Nott, who says she stopped buying clothes at M&S a few years ago because they were shapeless.
Britain’s largest apparel retailer, with more than 730 U.K. stores, yesterday began introducing new fashions such as 199-pound ($306) Per Una Speziale body-hugging leather dresses and 129-pound camel coats in stores and online.
It’s the first full collection under Style Director Belinda Earl and division chief John Dixon, who say the clothes will help turn around eight consecutive quarters of same-store sales declines in the general merchandise division and vindicate the strategy of Chief Executive Officer Marc Bolland.
As many shoppers have decamped for stores such as Inditex SA (ITX)’s Zara, this season’s lineup “will be make or break” for Bolland, said Maureen Hinton, a research director at market analysis firm Verdict.
“From what I’ve seen, I’m not going to go around telling everyone to come see this clothing,” she said during a visit to the Marks & Spencer in London’s Oxford Street shopping district. “It’s nice but not ‘wow.’”
Nice but not wow may be good enough for shoppers like Nott, who bought several items for a cruise after checking out the latest offerings.
Hinton acknowledged that the fabric quality had improved. And while the difference among sub-brands like Autograph and M&S Collection “isn’t obvious enough,” M&S has achieved more of a nod to catwalk fashions with a leather jacket and a navy overcoat that was “very DKNY,” designer Donna Karan’s department-store label.
Outside the store, two windows display a range of monochrome womenswear and a Savile Row-inspired men’s collection. Inside, four mannequins standing on a white light box sport fashions from various sub-brands in the new lineup.
Earl, the style director who joined last year from fashion brand Jaeger, told 1,500-plus investors at the M&S shareholder meeting this month that she was seeking to boost appeal to the brand’s core customer base of women over 55 years old. Changes include making sizing consistent across all M&S sub-brands, adding dresses with sleeves and longer hemlines, and using more higher-end fabrics like cashmere and silk.
The collection will be rolled out over the coming months, with new items coming into stores every six-to-eight weeks, and every two weeks for the younger Limited Edition range. The company says most stores will still have some summer clothes this week, though by early next month everything will be from the new autumn collection.
“If this range flops, the pressure on the whole M&S management team will rise,” Clive Black, an analyst at Shore Capital said. “There’s a lot of work for M&S to get Mrs. Britain back into their stores.”
The shares traded 1 percent lower at 473.60 pence at 1:49 p.m. in London.
Richard Marwood, who helps oversee more than $700 billion at Axa Investment Managers in London and holds M&S stock, said Bolland should be given more time to show improvement.
“I’m sure the new collection will attract quite a lot of attention and could drive investor sentiment,” Marwood said. “But I’m not sure we should judge either M&S’s prospects or Bolland’s future solely on the back of it.”
Brokerage UBS AG is forecasting same-store sales at the clothing division will rise 1 percent for the full-year, even though they fell 1.6 percent in the first quarter.
“If they can put the right products on shelves, I think customers still want to buy from M&S,” said UBS analyst Adam Cochrane, who rates the shares a buy. “They have incredible brand loyalty.”
CEO Bolland has said he’s “not happy” with the clothing division yet, though he hasn’t offered a timetable for improvement. “This is a step-by-step approach,” Bolland said on a July 9 conference call with reporters. “But I think people will already be pleasantly surprised by what they see in stores.”
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