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Marks and Spencer is now in the final year of a three-year plan to rejuvenate the profits of this once market-leading food and clothing retailer. CEO Marc Bolland recognised that extensive reorganisation was needed when he took over, and he set out the £2 billion plan to turn around the company’s fortunes. However, at the moment there are insufficient signs that he has been successful.
Once again, when drilling through the figures, it is the clothing and homewares side of the business that has let the team down, with second-quarter sales dropping 1.3%. This has not been a particularly smooth year for the company, with managerial and divisional changes disrupting the transaction of the business. However, it is the board’s inability to inspire a younger generation of shoppers with the Marks and Spencer brand that is particularly worrying, as the demographic of its core consumer continues to get older and older. Regardless of the fact that the company is approaching its 130-year anniversary, unless it delivers a product range to entice the younger generation it will not be around for another 130 years.
It appears the markets have been willing to wait for the three-year transformation process to complete before voting with their feet. But if this does not materialise soon, Marc Bolland will be looking over his shoulder nervously.