Marks & Spencer [IRDX RMAS] today reported growing full-year sales but said profits had been hit by investment in transformation, which includes its plans to “reshape and improve its UK store estate for a multichannel world”.
Group revenue reached £10.6bn in the 52 weeks to April 1, 2.2% ahead of the same time last year. But pre-tax profits of £176.4m were 63.5% down on last time.
Steve Rowe, chief executive at Marks & Spencer, said that its restructuring to build strong foundations for the future had come at a cost and had hit profits, but that it was still strongly cash generative. He said: “Looking ahead, we will continue our programme of self-help in a tough trading environment. We remain committed to delivering for our customers and shareholders as we build sustainable foundations for the future.”
Robert Swannell, Marks & Spencer chairman said: “This has been a year of accelerated change at M&S, as Steve set out his plan for a simpler business, focused on customers. We believe these actions will make M&S a stronger, sustainable business.”
Here are some of the highlights of its multichannel strategy.
Some 17% of total sales were made online over the year, as ecommerce sales grew by 4.9% compared to the previous year. M&S said performance was affected by lower participation in cyber events – it took part in eight fewer than last year. The retailer said it held three fewer clearance sales and removed “unproductive promotions such as Black Friday category deals”. The retailer plans to focus on mobile as it invests to make the online customer journey faster.
Online grocery purchases, through M&S’ entertaining and gift food offer, grew by 9%.
Stores play an important part in M&S’ work to improve customer experience across its channels. It plans to refresh 25% of its clothing and home space over the next five years and grow its Simply Food stores by adding about 250 new stores by the end of 2019/20. It says that in response to customer feedback it will introduce more product choice in smaller stores, and rebalance its space towards potential future growth areas such as kidswear and home.
M&S says it will build on its succcessful Sparks loyalty programme, adding greater levels of personalisation. The Sparks club now has 5.6m members – who are buying more often.
The retailer, ranked Elite in IRUK Top500 research, said that its strategic focus was on quality, innovation and convenience.
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- Marks & Spencer