- Marks & Spencer chief to unveil plans for clothing turnaround
- CEO’s challenge: Luring younger women while keeping retirees
Four weeks before Britons vote on whether to leave the European Union, one of the U.K.’s most storied retailers is also engaged in a bout of soul-searching over how to regain its status as Britain’s clothier of choice.
Less than two months into the job, Marks & Spencer Group Plc Chief Executive Officer Steve Rowe is set to unveil his turnaround plan Wednesday before analysts and reporters at the company’s London headquarters. He’s aiming to stem a four-year decline in the company’s clothing sales, which hastened the departure of his predecessor.
Rowe, who started at M&S as a teenager stocking shelves, has enlisted model and fashion blogger Alexa Chung to create a retro-chic collection aimed at the younger shoppers who now favor Zara or H&M, and he has made some items available straight from the catwalk.
His challenge is how to attract more style-conscious females without alienating shoppers over the age of 55, who still account for about 60 percent of M&S’s clothing sales. Ninety years after M&S sold its first bra, forging a bond that now sees one in three U.K. women wearing its undergarments, its new leader faces two polarized constituencies in a referendum of his own.
“The problem M&S has is that young women don’t want to shop in their mum’s favorite store,” said Richard Hyman, an independent analyst who tracks the fashion industry.
In trying to appeal to both mothers and daughters, Marks & Spencer has failed to please either group. It’s lost market share to everyone from fast-fashion pioneer Primark to grocer J Sainsbury Plc. As sales have ebbed, so have the shares, sliding 25 percent in the past year.
When Rowe replaced Marc Bolland as CEO in April, he kept direct control of the clothing business, which he has headed since last July.
Rowe borrowed a tactic from Burberry Group Plc and other luxury goods providers, making available certain items from M&S’s new “Big Easy” collection, such as an ivory-colored “shirt dress” and cropped leather trousers, as soon as they appeared on the fashion-show runway this month. Previously shoppers had to wait as much as several months -- by which time they often moved on to other products.
Borrowing a tactic from Gucci in a campaign to attract younger shoppers last year, M&S shot promotional images for the Alexa Chung range, which includes modern takes on a trench coat from the 1950s and a ruffled blouse from the ’80s, using traditional film and Polaroid cameras. It was a stylistic departure from M&S’s typically polished productions.
While the collection is “fine as a short-term initiative, M&S needs a longer-term plan to make stores a destination for women,” Tony Shiret, an analyst at Haitong Securities, said by phone. He said Rowe could attract younger parents into its stores by improving the styling of M&S’s children’s clothing.
Paul Rossington, an analyst at HSBC, expects Rowe to expand the retailer’s mid-season apparel collections. That’s a strategy Zara owner Inditex SA and H&M parent Hennes & Mauritz AB have used to draw shoppers into stores more regularly.
U.K. general merchandise, the division that includes apparel, provided 4 billion pounds ($5.82 billion) of M&S’s revenue in the year ended March 2015, compared with 5.2 billion pounds for U.K. food. But profit margins in clothing are about 60 percent higher.
If Rowe can fix the women’s range, he could benefit from investments by Bolland, who overhauled the retailer’s IT systems, introduced a loyalty card and invested in two new distribution centers.
The upgrades were aimed at avoiding problems like those that occurred when a suede skirt flew off the shelves last year. Short of inventory, M&S over-ordered, and the star performer of its summer range ended up in January’s clearance sale.