Marketing Marks & Spencer Retail

CEO Steve Rowe: ‘The M&S brand is not disappearing’ despite mass store closures


By Jennifer Faull | Deputy Editor

November 8, 2016 | 4 min read

Marks and Spencer chief executive Steve Rowe rebuked emphatically today (8 November) industry concerns that the brand is in danger of a BHS-level collapse, despite confirming that some 30 of its UK stores will close over the coming years as it tries to halt haemorrhaging general merchandise sales.



“The M&S brand is not disappearing,” assured Rowe.

No, but it will look drastically different as it invests in the opening of 200 Simply Food stores instead of expanding its beleaguered general merchandise business.

The announcement follows much speculation as to the fate of M&S’ fortunes outside of food. Pre-tax profits for the 26 weeks to October 1 were down 88% to £25.1m as a result of changes to staff pay and pensions and a £22m charge for insurance misselling in its bank. Stripping out these one-off costs, profits still fell 18.6% to £231m.

It’s a blow to M&S' efforts to revive the brand. Rowe took the helm in April this year and within a month had announced a strategy to try and win back the so-called ‘Mrs M&S’ that had been forgotten in its rush to stave of the threat of fast-fashion competitors.

On its progress, Rowe said the retailer hired around 3,000 assistants to improve the in-store experience and has continued with efforts to streamline the head office. It's also used the data from loyalty scheme sparks, which has attracted over one million members - to shape the retailer's offering.

Overall, its Net Promotor Score “has gone up for the first time on four years” and the “customer feedback has been great.”

But as this five-year consolidation plan came to light it is clear those efforts are still failing to reignite interest among shoppers that it's lost over the years.

In addition to the UK store closures, M&S will have also converted around 30 existing GM stores to Simply Food branches, shuttered 53 loss-making international stores (exiting 10 markets) and ‘refresh’ around 100 stores by 2021.

“In the future, we will have more inspiring stores in places where customers want to shop that complement our growing digital offer,” said Rowe. “These are tough decisions, but vital to building a future M&S that is simpler, more relevant, multi-channel and focused on delivering sustainable returns.”

Despite this talk of multi-channel, online sales were only up 0.3% in the first half of the year, an underwhelming rise it blamed on the reduction of cyber days from nine the year prior to just one in 2016.

As Catherine Shuttlewort, retail analyst and chief executive at shopper-marketing agency Saavy puts it, M&S quite simple isn’t winning over hearts and minds.

“Whilst Rowe tells us customer satisfaction is up, the problem is that the measure is of existing shoppers - the shoppers he really needs to impress have already gone elsewhere,” she said. “And as Primark post results of + nine percent this morning it really does place into very clear focus the significance of M&S business challenges.”

The role of marketing to woo these shoppers, then. The team was streamlined earlier this year and it then dropped its advertising agency of 16-years RKCR/Y&R in August in the hopes Grey London could bring a fresh perspective. But, perhaps tellingly on where is falls on Rowe's priority list, advertising costs were reduced in the first half of the year.

It has repeatedly lauded the power that it's Sparks data holds and Rowe said that's leading to greater investment in more direct marketing channels over above-the-line.

An update on its marketing strategy is expected later this week (Friday 11 November) when M&S reveals its all-important Christmas campaign.

Marketing Marks & Spencer Retail

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