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May 23, 2014 7:30 pm
When Simon Marks was chairman of Marks and Spencer he was known for an obsession with quality.
“You are trying to ruin my business,” he would say to stock selectors who he thought had chosen substandard products.
In December 1964, unhappy with the garments in the ladies’ tailoring department, he began hurling them on the floor, only to collapse from a massive heart attack minutes later.
But Lord Marks, who became chairman in 1916 after a battle for control of the business that his father Michael had created from a penny bazaar, was also obsessed with value. It was his view that “an inexpensive article need not be shoddy”.
It was this combination – good quality at an affordable price – that was the hallmark of the first golden age of M&S, in the latter parts of Lord Marks’s tenure
Today, although M&S has a successful food business, when it comes to clothing and homewares it is fighting to regain its place in the British shopper’s psyche.
This week, chief executive Marc Bolland announced a 4 per cent decline in underlying pre-tax profit, the third successive year of decline, and said a new website, relaunched in February after a £150m makeover, was suffering from teething troubles.
“It is a bleak age at M&S,” says Neil Saunders, managing director of Conlumino, the retail research group.
According to Judi Bevan, author of The Rise and Fall of Marks and Spencer, under Lord Marks and his successor Lord Sieff, M&S introduced innovative products such as washable wool, which until then had only been available from expensive department stores.
“M&S just completely undercut them. In a way, they were the Primark of their day,” she says.
The market today is different in every conceivable way to those associated with the golden ages
- Retail consultant
If the hallmark of Lord Marks’s era was quality combined with value, the second golden age was in the late 1980s and early 1990s, when M&S still offered good quality basics to a large section of the population, but also embraced fashion.
The Rise and Fall of Marks and Spencer cites Vicki Woods, the former editor of Harpers & Queen, describing how in the early 1990s, her young staff on Harpers would spend afternoons in M&S. They were “rootling through every garment in the store, looking for the M&S star purchases: the things that looked as though they came from Bond Street but sold for a tenth of the Bond Street mark-up.”
It was the first UK retailer to make £1bn in annual profit, in 1997-1998. But the company was torn apart by a bitter succession battle in the late 1990s. Despite a brief recovery under Mr Bolland’s predecessor, Sir Stuart Rose, some analysts believe the company has never really regained its stride.
Mr Bolland has put improving both style and quality at the heart of his plans to revive M&S’s clothing sales, where its share has fallen from 16 per cent in 1997 to 11.1 per cent in 2013.
A year on from a high-profile revamp of womenswear, he said this week that basic product quality was improving, while M&S planned to use more cotton, wool and leather in more upmarket products. As for making its clothes more fashionable, he said M&S had recruited new designers who were coming into their own, and winning plaudits from the fashion press.
M&S had also invested £2.3bn carrying out the necessary “heavy lifting” to make the group “fit for purpose” in the modern age.
Richard Hyman, the independent retail consultant, believes progress is being made, with better fabrics, better styling and better presentation in stores.
But even this may not be enough to revive the glory days. “The market today is different in every conceivable way to those associated with the golden ages,” says Mr Hyman.
The value sector – dominated by Primark and the supermarkets – accounts for about 30 per cent of the market today, compared with less than 5 per cent 20 years ago, according to Mr Hyman.
Spain’s Inditex, which opened its first Zara store in the UK in 1998, is winning shoppers with affordable takes on catwalk fashion, which it can get to stores in as little as two weeks. Next, meanwhile, is “fine tuned” to the 25-45 age group, says Maureen Hinton, group research director at Conlumino.
John Lewis, meanwhile has displaced M&S as a national treasure; the employee-owned retailer has also built impressive fashion and home furnishing departments.
M&S says its customers tell it that the retailer “holds a special place in their hearts and minds, one that has been established over the last 130 years. This heritage helps us create the M&S of today”.
It adds: “We know they want quality and style from our clothes and speciality in our food and we’re restless about using this feedback to constantly improve the M&S that is known and loved by many.”
But some analysts believe M&S should stop chasing past glories.
Tony Shiret, an analyst at Espirito Santo, who has in the past called for such radical actions as merging with Next and starting a young fashion chain, believes M&S must “think outside of the box”.
Mr Hyman suggests the retailer needs to shrink and possibly move into private hands. “M&S has to reinvent itself,” he says.
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