News Feature
Marks and Spencer has always been the by-word for rest-assured quality and value in its products. However, times are changing, and with that comes the fact that the Marks and Spencers brand, formed in the late 19th century by Michael Marks and Tom Spencer, is yet again seeing profits slide. The company currently has 300 stores nationwide, with 150 additional stores worldwide. But, despite this success in the high street, the tide appears to be turning for the store, with profits year on year beginning to slide. What does this mean for the future of the store, and where can it go from here to stop the rot?
Nick Ramshaw, managing director of design consultancy and brand experts Elmwood, believes that the company and brand needs a radical overhaul if it is to succeed in the future. He said: “I don’t really shop in the store too much, but from what I can see the problem is really in the fashion side of things – I think that the food end of the store is coping well. The main reason they are having problems is that there is a perception that the clothes sold are really frumpy and not aimed at the younger market. If you look at the high street there are stores such as FCUK, Zara and even Next that can offer more fashionable wear at a lower cost.
“What they have to do is put in a creative director who will be able to overhaul the business making it accessible to younger customers. This could be achieved by dropping the St Michael’s brand and perhaps aligning itself with celebrities in the future.”
But Ramshaw is positive that this is not the beginning of the end for the high-street colossus, commenting: “I don’t think that it is all doom and gloom for them, and I predict that even in five to ten years’ time Marks and Spencers will still be on the majority of high streets in cities throughout the UK.”
Erik Davidson, chief executive of Tayburn, admits that he has fond memories of the high-street giant, having been given his first job as a graduate trainee at the company. For Davidson, the recent reports of the company’s imminent demise are slightly overstated: “We need to put this into context, really,” he comments. “I mean, if you look at the bigger picture, they are still doing pretty well, with a £740m profit last year. They do, however, have a problem when it comes to the design and branding of the store. The problem that they face is something that McDonalds has also come up against. Basically their clientele are becoming more discriminating and want something more for their money in terms of style and design than what they are getting at the moment. The store has been taken downmarket to an extent and it has suffered for it.”
For Davidson, the key to getting the brand back on its feet is to aim toward one specific section of society, and focus on what they really need and want from a department store. He comments: “They are aiming at the right market – 30- to 50-year-olds. But what they have to remember is that this age group is very discriminating and will spend more money on quality items. The brand at the moment is like a Ford car and they should become more like a Volvo in order to succeed.”
Managing partner of Agency Assessments Andy Crummey agrees with Ramshaw, believing that the store must now go after younger customers in order to survive against its competitors. He comments: “Marks and Spencers has always prided itself as being the leader of the pack, but I think over the past few years it has suffered as customers realise that they can get elsewhere the quality and value for money that Marks always prided itself on. Clothes shops like Zara offer great goods, at less than Marks, and the food side of things is also beginning to suffer. The store must now come up with a way to bring back the customers, offering them more than their competitors. At the same time they have to make their offering younger, while keeping in mind the fact that grannies like to shop there. They have managed to reposition themselves in the past – for example, the Marks and Spencers that I grew up with is different from the one that my parents remember and they need to be able to do the same thing now. I am sure they will survive though.”
Rob Morrice, regional chief executive of the Incepta Group, disagrees with Crummey, maintaining that the food sold in the store is its one saving grace. He comments: “They have got the food aspect right by focusing on the own brand and making it the best the high street currently has to offer. But now what they need to do is really turn their attention to both the clothing and the homeware that they are currently selling. I do think that they will need to drop the St Michael’s brand in order to move forward, as it holds too many negative connotations. You have to remember that mums are getting younger and far more discerning in their tastes. Mothers in their 30s now wear clothes that women who work at Citigate are wearing in their 20s. Marks needs to wise up to this and start to bring in fashionable young designers to design the ranges instead. Otherwise, I think that the brand could end up like C&A and gradually disappear from the high street altogether.”