Sink or swim

Once upon a time it would have been all but inconceivable that Marks & Spencer, arguably the bluest of blue chip retailers, would be on the receiving end of regular written beatings in the popular press. But it is.

City pages bemoan the chain’s performance. Key M&S customers discuss its failings over coffee. And the chief executive admits publicly that his plans to rescue the ailing giant aren’t working quickly enough.

Make no mistake, design and its management are not the only problems for M&S. The company has also failed to keep pace with innovative rivals in several of its key market sectors, and has seen itself underpriced and outperformed.

Working out who is responsible for design and branding at M&S is difficult, and those who have worked with the group suggest that this is one if its key problems. The managing director of one design consultancy which has recently worked for the retailer, but wishes to remain anonymous, says that nobody at M&S is acting as an obvious guardian for its brand. “Everything seems very divisionally led,” says the managing director, adding that the consultancy was originally brought in, not by M&S, but by a supplier concerned that M&S was not making the most of its opportunity to sell products.

Others agree. Jill McArdle, retail specialist at design group BDG McColl, has close links to M&S. “It’s myopic,” she says. “Brand guardianship is too far down the chain of command.”

McArdle elaborates, saying: “While we have witnessed numerous initiatives in terms of category enhancement and flagship store design, the overall effect is marred by the lack of an overall design narrative.

“You are still faced with the functional/ institutional merchandising the lack of basic understanding of what constitutes the brand journey much less the brand values,” she adds.

An M&S spokeswoman says the director ultimately responsible for store design and branding is the head of marketing, Alan McWalter, but she is unable to give full details of exactly who holds which responsibilities. On the hiring of a replacement for design director Brian Godbold, the spokeswoman said: “I don’t think we’ll be announcing anything in the foreseeable future. We’re still looking.” M&S has subsequently given up its search for a new design director (DW 9 February).

There is, at least, a will to find somebody to safeguard the M&S brand, even if the practicalities are proving difficult. Last year the company formalised its brand design and strategy unit, under McWalter, for exactly that reason.

Any confusion over exactly who does what is perhaps understandable: new blood is being transfused into the M&S chain of command at an accelerated rate, as chief executive Luc Vandevelde seeks expert staff to get the company back in shape. This represents an enormous change for the M&S culture.

The company has long been respected for the quality of its management training, and it used to be the case that if managers fitted in they could reasonably expect a long and rewarding career within M&S, or they would be snapped up by other retailers. The phrase “M&S management trainee” appears on more than its fair share of retail chief executives’ curriculum vitae. But things have changed, and faces are now shifting on a far more regular basis.

A team of senior retail executives has been recruited for the boardroom (see Recent Management Changes list), giving rounded experience, much of it gained outside M&S. Fashion expertise is being sought, too. Warehouse managing director Yasmin Yusuf is to join M&S in April as creative director of clothing.

Yusuf’s mission is to recreate her success at Warehouse – she turned the loss-making business into a profitable one in two years. M&S managing director of UK retail Roger Holmes says: “Her ability to identify trends and translate design into wearable high street fashion is already proven. We look forward to her joining Marks & Spencer at this key point in the company’s development.” Yusuf, a board member, will be responsible for the central design team and will co-ordinate design and product direction across the clothing business units.

The criticism of recent M&S fashion ranges has stung the company, making this a key area for the chain. That could be why two fashion heavyweights were appointed within a week of one another at the end of January and the beginning of February.

The original founder of Next, George Davies, had a second fashion success with the George range at Asda. From October, he will design, manufacture and supply a new women’s fashion collection for M&S. According to the retail group: “His collection will be aimed at the fashion-conscious woman who defines herself by attitude, not age.” Up to 100 M&S branches will take the range initially, selling it in specially refitted areas.

“Prices will be competitive with the high street,” says an M&S spokeswoman. But little else is known about this grand plan to rescue the Holy Grail of M&S womenswear, an area which Vandevelde admits is failing dramatically. Nobody at M&S can confirm which consultancy or designer will create the new womenswear sections. Nor can they confirm what the brand will be called – although it is likely to be branded, to some extent, with the imprint of Davies – or how Davies’ role will fit in with that of Yusuf. The exact locations of stores that will sell the range have not yet been decided.

Confused messages have been emerging from M&S for some time, in a number of guises. Last year, for example, the group fuelled controversy by showing a large woman without any clothes on. The woman, running up a hill in the M&S TV ad, was attempting to put across the message that it was OK to be yourself, and that M&S would cater to your clothing needs. Why, then, did the chain’s New Year campaign centre on two young women discussing the success of their diets, using M&S food?

A lot of traditional M&S customers have been left bemused by the merchandise selections in stores. Fashion designers, such as Julien Macdonald, Katherine Hamnett and Betty Jackson were recruited to develop the Autograph range last year, in an attempt to inject some boutique-style glamour into M&S. Last week the retailer launched its Spring Home Collection 2001, a range of homeware products.

But is this what people want from M&S? Long term M&S account holder Paula Taylor-Lowen, formerly a loyal shopper, is dismissive of this trend. “They’re not as good as they were… and the more ‘exclusive’ ranges are very expensive for what they are. And let’s face it, they’re not going to be exclusive. They’re in Marks & Spencer,” she says.

The St Michael brand – once considered a national treasure – is now given far less prominence, and this strategy appears to be continuing with the appointment of Davies.

The chain is also currently refurbishing its stores, although, given the state of some of them, it might be prudent to do it more quickly. Certain stores – and the Kings Road branch in London is a prime example – look run down compared to their neighbours. Last year M&S committed £150m to refurbishing the entire store portfolio over three years.

Additionally, it is planning to install Internet kiosks in stores, so customers can order clothing from its website. The system, which will only allow access to the M&S website, is being tested at the chain’s Kensington store in London and will eventually be offered at more locations.

It is often joked that the number of consultancies employed by a company is inversely proportional to its own confidence to make decisions. Three design consultancies were involved in developing the new M&S store format: Rodney Fitch & Co, Carte Blanche and David Davies. Additionally, Mary Lewis of Lewis Moberly is a consultant to the chain, and a range of other consultancies has worked on individual product initiatives for the group.

Carte Blanche worked on the childrenswear area, which is now being implemented following a trial at M&S’s Fosse Park store, near Leicester, last year. Carte Blanche partner Su Davies says the group worked directly with M&S senior director Charles Jaggard. “He had a firm grasp of the brand, and good control,” she says. But on a wider basis Davies is less convinced that the company has a grip on the design process. “M&S needs to be more experimental They have looked at the environment in one or two areas, but the rest is letting them down badly.” According to Davies, scale is one of the company’s problems. “For such a large group, it is logistically quite a difficult task,” she says. “But I don’t get the impression that the whole company has embraced the change.”

Refurbished stores have some interesting new features, but not all of them show the understanding of customers that used to mark M&S stores of old. The Oxford Street branch is one of the most prominent in the UK, situated on the country’s biggest pedestrian thoroughfare. In an area that probably boasts as many coffee shops per square mile as Milan, yet M&S has chosen to install an espresso bar in the store’s basement. In such a location, who would choose to drink their coffee in M&S? Nobody, while I was there.

The first floor menswear department has several rails of cargo pants, in a nod to one of the big fashion items of the last millennium. As a “youth” area, this section of the store has a bank of six video screens, loudly playing MTV. Somehow, this just did not gel with the table, only metres away, selling trilby hats. It is easy to see why customers are confused.

In the old days M&S would simply have told customers what to think, but that kind of arrogance doesn’t seem to work anymore, and it’s unlikely the company would try.

Six years ago, I attended an M&S press conference where the company was announcing its latest results. The then-chairman, Sir Richard Greenbury, parried questions he didn’t like by scolding younger reporters for their nosiness. I overheard two City hacks laughing that Greenbury was “always good value”.

Nowadays, if an M&S executive was brash enough to make such comments, he or she would run the risk of being publicly flogged by shareholders. Investors in the chain want answers – and it will probably be the amount of patience they have that will dictate what happens to M&S next. Vandevelde has set himself a two-year deadline to improve the performance of the chain. If he fails, it will take brave people to replace him.

Matthew Valentine is editor of In-Store Marketing

The rivals

A lot of the problems at M&S stem from rivals encroaching on areas in which it was previously dominant.

In clothing, the group has seen a gradual erosion of the middle market. Fashionable youngsters have never been key M&S shoppers, but people who were – those seeking good value, ‘sensible’ clothing – now have other places to go. Bargain hunters like the expanding Matalan chain and clothing companies such as The Gap, as well as high street groups such as Next. All of them have eaten into M&S’s profits. Even underwear, formerly synonymous with M&S, has seen new competitors such as La Senza emerge.

In food, M&S was once the undisputed king of the quality instant meal. The company’s product is probably still as good as it ever was, but the competition has improved dramatically. Tesco set itself a mission to introduce premium quality foods with its Finest range, and succeeded. All of the other supermarket chains have followed suit. An extra trip to M&S is now no longer necessary for many shoppers in a hurry.

Recent management changes

2000

27 June M&S announces launch of two business units designed to put the customer at the forefront of all activity. The Marketing Strategy Unit, headed by Nick Penny is to incorporate market research, customer relationship management, brand management and local store cataloguing. The Brand Design and Delivery Unit looks at external marketing, in-store marketing, store design, marketing publications and creative design. It is currently without a head. Both groups report to group marketing director Alan McWalter

13 July M&S announces it will be opening three factory outlet centres, with the potential for a further seven

18 September New senior management team announced. Those leaving the company include chief executive, Peter Salsbury; executive director for UK stores and group personnel, Clara Freeman; executive director international retail, business systems and IT, Guy McCracken

Executive chairman Luc Vandevelde takes on the chief executive’s role, appointing former Kingfisher head Roger Holmes as UK managing director, and moving M&S Ventures Division chief David Norgrove to the position of executive director of strategy, international and ventures

6 December Former Asda/ Wal-Mart Hypermarkets UK managing director Justin King appointed as M&S business unit director, foods. Former Liberty managing director Michele Jobling appointed business unit director, childrenswear

2001

29 January Warehouse managing director Yasmin Yusef appointed as creative director, clothing

2 February Next founder George Davies commissioned to design, manufacture and supply new women’s fashion collection

M&S history

1884 Michael Marks hires open stall in Kirkgate Market, Leeds

1894 Marks forms partnership with Tom Spencer

1920s M&S starts buying direct from manufacturers

1926 Limited company formed

1928 St Michael trademark registered

1931 Food department introduced

1975 Stores open in France and Belgium

1985 M&S chargecard launched across UK