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The key points for review-M&S |
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2004-7-13
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Stuart Rose, the new chief executive of M&S, set the following points for review to revive the retailer.
Focus on the core business and brands such as Per Una, Blue Harbour and Simply Food.
A trial Lifestore outlet for homewares, at Gateshead, will be closed, with the rollout of more Simply Food outlets stopped.
Financial services business M&S Money will be sold to HSBC for £762m, but M&S will continue to get a share of the profits from the business.
Introduce better product ranges. Autumn clothing has already been bought, but M&S eventually wants fewer lines with ranges bought in greater depth. Prices will be sharpened, with the emphasis on "good, better, best".
In the food halls, M&S has already cut 500 lines because it felt the business had become over-complicated.
Improvements to sourcing and supply chain. New terms with suppliers and a tighter operation of the supply chain should deliver £175m of buying improvements and reduced costs by 2006/07.
Fewer markdowns on products and a lower level of waste in the food department could add another £50m.
Total savings in the financial year ending 2007 are expected to be £320m, including from the removal of 650 jobs.
Better co-ordination on external advertising and in-store decor. There will also be a programme to modernise existing space at a cost of under £400m a year.
M&S will take complete control of the Per Una business after agreeing a deal with George Davies, who developed the brand. The fashion guru will remain chief executive of the £250m turnover business.
Around £2.3bn will be returned to shareholders, financed by factors including the sale of M&S Money and new bank facilities.
Company’s property portfolio - based around 375 stores - has been valued at £3.6bn, compared with a previous figure of around £2.2bn. |
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