The enormity of the task facing Marks & Spencer may have dawned on its board of directors this week, as movie heartthrob Hugh Grant appeared to be its latest customer casualty.
After further poor UK sales last week, headlines like “sales still falling as directors take flak”, and “M&S fails the quality test”, appeared in the national press. The turnaround in the fortunes of the Great British retailer is certainly not happening soon enough for its shareholders nor the broadsheets, which were unanimous in labelling Marks & Spencer as “the struggling retailer”. Grant is reported to have given up M&S sweaters to become “a little bit sharper”. It sounds like things are going from bad to worse.
On the bright side, Rodney Fitch & Co, BDG McColl, John Herbert Partnership, Interbrand Newell and Sorrell and Revolution, are tipped to be the strongest consultancy line-up any retailer could hope for. The issue now is how much room they are being given by M&S management to review its whole retail proposition.
Nobody doubts that changes will have to be further reaching than simply cosmetic, but in many ways the success of the case will stand as a significant test into the power of retail consultancy.
The game plan is certainly being guarded heavily by M&S. None of the groups involved are allowed to talk about their roles. More alarming still is that key decisions about the future direction of target customers do not appear to have been made.
“At this stage, there are still things to be decided,” says M&S regional director for food marketing and operations, Bob Fee. “We are looking at the successful elements of our store launch at Bluewater. We are using Rodney Fitch & Co to see which elements to apply elsewhere.
“The visual work that is going on is to create a look in the general merchandising across the 100 stores being refurbished. Food will be handled on a separate basis,” he adds.
If, as Fee says, things are still to be decided the job could be a long haul. Until it is clear whether proprietary brands will be sold, and who the St Michael label will target, it will not be easy to conceive store formats, refine brands or refresh identities either.
An M&S spokeswoman cannot comment on the future of its brands. “We are keeping our powder dry because decisions are yet to be made about the brands,” she says, although she does outline concepts being applied to the 125 stores by the John Herbert Partnership. These include “striking” window displays, simpler store layouts, with new look signage and photography. Fitting rooms will be refurbished, aisles widened and the customer service areas and ordering facilities tweaked too.
Until the autumn clothing range is out, the public will just have to wait, although it will be spring before the food concepts are likely to be seen. This gives rival groups like Arcadia more breathing space to manoeuvre. Arcadia recently launched an e-commerce website, Zoom, designed by The Fourth Room. The Fourth Room chief executive Piers Schmidt echoes an opinion that Marks & Spencer has consistently failed to respond to changes in competition over the past decade.
The arrival of US clothing retailers like The Gap, plus continuing food innovation from supermarkets like Tesco, have cost M&S its high ground, he says.
“People like Gap have brought in the idea that you can have ten varieties of blue sweater, not just four colours full stop. US retailers have shown that if you can delight your customers with a wide product range, the profits can justify the costs involved to do so,” he says.
In many ways, the fundamental clothing proposition espoused by M&S of non-budget, non-designer label products has been eroded too. The giant family stores of the US like Wal-Mart and JC Penney are well known for their value for money items which sit alongside more expensive clothing labels. Customers get choice.
“Competition has come from everywhere. People once bought underwear from M&S religiously, but now labels like Calvin Klein have challenged the M&S own brands and shown that people are prepared to pay for them too,” says Schmidt.
Clearly, Hugh Grant’s new look will be of great interest to the M&S board of directors. Let’s just hope they are not holding out on key decisions just for him.
M&S stores in the £11m refurb
Glasgow, Inverness, Stirling, Greenock, Dumfries, Kirkaldy, Ballymene, Dunfermline, Kilmarnock, Workington, Blackpool, Bradford, Macclesfield, Altrincham, Bury, Barrow, Wigan, Darlington, St Helens, Lancaster, Rochdale, Durham, Sutton Coldfield, Stoke, Coventry, Leamington Spa, Burton, Kettering, Stafford, Wrexham, Rugby, Leicester, Scarborough, Lincoln, Hull, Wakefield, King’s Lynn, Boston, Newark, Mansfield, Buxton, Grantham, Cambridge, Northampton, Hemel Hempstead, Bury St Edmunds, Aylesbury, Luton, St Albans, Bedford, Swansea, Cheltenham, Swindon, Stratford Upon Avon, Banbury, Hereford, Newbury, Neath, Exeter, Bournemouth, Truro, Plymouth, Portsmouth, Fareham, Yeovil, Winchester, Falmouth, Brighton, Canterbury, Colchester, Eastbourne, Folkestone, Ashford, Dover, Margate, Deal, Guildford, Sutton, Slough, Staines, Windsor, Aldershot, Basildon, Tonbridge, Chelmsford, Horsham, Southend, Orpington, Brentwood, Beckenham and the following London stores: Tooting, Richmond, King’s Road, Edgware Road, Eltham, Hammersmith, Clapham, Enfield, Brixton and Islington