MandS facia

Does Marks and Spencer need a central operations review?

M&S front

So the general merchandise blip was just a blip. Marks and Spencer reported another decline in like for like sales of its general merchandise business, in most part down to a sluggish womenswear range where the troubles have been and continue to be.

One or two key pieces that get a lot of press does not a season make. Last quarter did better than most expected, on the back of good PR and having enough stock of what the customer wanted to buy. However the underlying issues have not been addressed. A good womenswear season skews the results as does a poor womenswear season. A cooler Spring will be blamed leaving the business with excess summer stock that is probably selling now it is in sale and the weather is more seasonal. How that will affect the gross margin targets we will not know until later in the year but at the moment the forecast remains unchanged.

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Marks and Spencer do very well in attracting press to one or two key pieces each season which is to be applauded, but while the buyer receives the praise, it is coupled with criticism for a lack of stock, either due to limited distribution or because the marketing team have released a garment to press that is not yet available in store.

The good news is that Marks and Spencer is confidant and competent in its food business. The food team have a proven track record of organic growth, strong marketing campaigns and disciplined execution to deliver consistently. Add to that headroom for further growth as food expands further into new space and you can’t help but look at M&S as two separate businesses, one operating seamlessly, the other stumbling from one quarter to the next.

If we were asked by Marks and Spencer to make suggestions for its business we would definitely start with central operations, creating functions that plan, filter and channel into stores to fulfil the customer’s needs. Restructuring central operations is something that Retail Remedy has delivered in other fashion retailers very successfully and something that we know is incredibly effective in delivering profitable results in the short and long term.

It’s all about coordination and a central operations team managing retail operations and in store execution efficiently and seamlessly. If a piece of PR lands well then the customer will be asking for it in store. That’s when you want the product there ready to satisfy that customer, not weeks down the line when actually there is something else that has caught their attention.

While we hope that the womenswear buy is as strong as the next red hot piece to hit the fashion press, it is ultimately about how it is delivered in store. While the store formats leave customers drifting from one sub brand to another without knowing where they are going, the best range could still be disappointing without a concerted effort in visual merchandising and branding.

What we would like to hear from Marks and Spencer is two-fold; firstly a review of central operations, coordinated and efficient teams delivering what is best for the customer; secondly a visual merchandising overhaul to present what are on the whole good ranges in the best light possible. If we don’t, we could be writing the same thing again in another 3 months time. Let’s hope not.

Retail Remedy has successfully implemented  restructured central operations into many retailers with proven results. If you’d like to know more, get in touch today.

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