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Steve Rowe: M&S is changing faster than at any time in my career

Marks & Spencer (M&S) today laid down the comprehensive changes the business is undertaking to survive and thrive in today’s retail environment.

In a full-year results announcement for the 52 weeks to 30 March, it said profit before tax and adjusting items was down by 9.9% to £523.2 million off the back of a 3% group revenue decline.

UK food revenue was down by 0.6%, with like-for-like revenue down 2.3%, although this represented a slowing decline. UK clothing & home revenue dropped by 3.6%, impacted by store closures, with like-for-like revenue falling 1.6%.

Adjusting items not included in the headline profit figure totalled £438.6 million, including the £222.1 million costs associated with the acceleration and extension of its UK store closure programme.

Circa 85 full-line stores and around 25 Simply Food stores are set to close in the 12 months ahead, adding to the 35 full-line stores that closed in the financial year just ended. However, M&S said the strategy is “as much about right sizing, relocating and new openings as it is about closures”.

M&S CEO Steve Rowe said that the organisation “is changing faster than at any time in my career”, emphasised by the introduction of new processes, supply chain restructuring, the launch of fresh ranges, amendments to traditional operations, and multiple endeavours in digital retailing such as the forthcoming joint venture with Ocado to sell and deliver food online.

"We are deep into the first phase of our transformation programme and continue to make good progress restoring the basics and fixing many of the legacy issues we face,” Rowe explained.

“As I have said, at this stage we are judging ourselves as much by the pace of change as by the trading outcomes and change will accelerate in the year ahead.”

Although he showed confidence that the transformation programme is moving in a positive direction and “on the road to making M&S special again”, he added: "Whilst there are green shoots, we have not been consistent in our delivery in a number of areas of the business.”

Some of the new processes announced today included what the company described as bringing back “the voice of the stores”. It acknowledged over the years it has switched from a business that was product and store led to one with a “head office knows best mentality” – so, now store managers will lead trading feedback calls, have complete visibility of their own profit and loss figures, and be given more granular data to complete their jobs.

All store managers have been issued with tablet computers to release office bound time for the shop floor, but this Honeywell hand-held terminal programme which began in the last financial year has been extended and will be enhanced with new applications. There are also plans to accelerate the self-checkout provision and upgrade in-store Wi-Fi.

Over the last 18 months, several strategic technology partnerships have been forged by M&S, including with Microsoft, Decoded, Founders Factory and True Capital. The fruits of the Founders Factory alliance continued to emerge last week when M&S revealed a third start-up company had been selected for its retail accelerator programme.

Texel, a 3D digital fit company was sourced through Founders Factory’s global network, backed by M&S, and the investment is expected to result in mutual benefits for retailer and tech company.

Texel’s technology scans capture and measure people in 3D, creating a digital avatar of the user. It then uses its technology to recommend clothes that will best fit the user’s shape and size. 

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