M&S will continue to decline regardless of an future success in food, according to Ed Bowsher, a senior analyst at Share Radio, the UK’s first national radio station dedicated to business, finance and money, unless new boss Steve Rowe improves the quality of its clothing – particularly in womenswear.
In response to M&S results published this morning, Bowsher said: “The best news today is that the gross margin is continuing to rise – up around another 250 basis points in clothing and home.
“This gives new boss Steve Rowe some extra cash to invest in improving quality as well as some targeted price cuts. Margins are up because the supply chain has become much more efficient and that’s down to the Lindsey brothers who were recruited in 2014. Signing up the Lindsey’s was probably previous boss, Marc Bolland’s best move at M&S.
“With margins moving in the right direction, Rowe must now start to boost sales in general merchandise. That’s going to be really tough. But Rowe has to improve the quality of M&S’s clothes – especially in womenswear. If he can’t do that, M&S will continue to decline regardless of any future success in food.”
Following today’s publication of Marks and Spencer Group Plc Quarter 4 2015/16 Trading Statement 13 Weeks to 26 March 2016, chief executive Steve Rowe said: “I am very proud and privileged to be leading M&S. We are focused on getting even closer to our customers and putting them at the heart of everything we do.
“We had a mixed performance in the final quarter of the year. Our Food business once again outperformed the market by c.3.5% pts. Although the sales decline in Clothing and Home was lower than last quarter, our performance remains unsatisfactory and there is still more we need to do.
“Turning around our Clothing and Home business by improving our customer offer is our number one priority. I will update you on my thoughts on the business in May.”