A British purveyor of retail tradition seeks spiffier image
It is a British institution with a reputation as solid and enduring as that of Queen Victoria, who was in the 47th year of her reign when it was founded. Today, 101 years later, the winds of change are blowing through Marks & Spencer PLC.
As Britain's largest retail store, with sales last year of 3.2 billion (about $4.5 billion), it has long been known as the place to buy socks, underwear, and good, solid, if somewhat old-fashioned, clothes.
Now, however, ``Marks & Sparks,'' as it is widely known, is trying to bring its dowdy image into tune with the fashions of the 1980s.
``Our image is a little bit dated and we are seeking to make shopping more comfortable, more exciting, and more dramatic,'' said a Marks spokesman, Tony Kelly.
Added John Richards, an analyst at the stockbrokerage Wood Mackenzie & Co., ``Marks & Spencer has entered a period of change and experimentation. Everything is being questioned. Every aspect of the company is being looked at.''
The signs of change are becoming visible. The traditional ``warehouse'' d'ecor is steadily being replaced by blazing lights, new carpeting, and bright colors. Still, the company seems determined not to lose its reputation for quality.
``It's good value,'' says Jenny Holder, a housewife from Kent, in the store to buy two shirts and two cardigans. ``If there's anything wrong, you can bring it back. If I want to buy underwear, I wouldn't think of going anywhere else.''
The main focus of these changes is on attracting younger, more fashion-conscious women. Although Marks has maintained its 15 percent share of the United Kingdom clothing market for the last few years, analysts said it has not managed to cater for the fashion needs of the 25- to 45-year-old working woman. Smaller specialist chain stores, like Next, Principles, Benetton, and Options, have successfully moved to bridge that gap in the last five years.
With 265 stores scattered throughout the United Kingdom and floor space of 7.2 million square feet, Marks has never been able to be a trend-setter.
``Its size presents problems in moving fast,'' said Tim Draper, an analyst at Hoare Govett Ltd., another London stockbrokerage. ``It responds to trends, but does not set them. Possibly the most it can offer is lagging the fashion market by one or two seasons.''
The man overseeing the new look at Marks & Spencer is Lord Rayner, the company's first nonfamily chairman. Since taking over from Lord Sieff in 1984, he has adopted a markedly different approach from his predecessor, who ran the business largely as a family concern, relying more on what analysts described as a seat-of-the-pants, instinctive approach. Lord Rayner, however, has opted for modern management methods which are more market-oriented, and, according to the company, involve greater de legation of responsibility.
Lord Rayner's chairmanship has so far involved dramatic change and a battery of experiments aimed at finding the winning retailing formula for the next decade. Marks plans to invest just under 300 million ($420 million) to modernize its stores over the next two years. Some 700,000 square feet of floor space will be added.
``For the first time, Marks is beginning to think in terms of how its stores are laid out,'' Wood Mackenzie's Mr. Richards explained. ``This was not considered an important aspect as long as it was providing value for money.''
The company is also offering a greater product range in its core businesses, of which clothing accounted for about 50 percent of sales last year; prepared food, 40 percent, and housewares 10 percent.
Marks is offering clothing styles in new fabrics like silk, leather, and satin, and it recently introduced a third selling season with new lines to be sold during spring.
The store is also beefing up its food division, which has grown rapidly in the last five years from barely 30 percent of the company's overall sales to 40 percent, or 1.2 billion ($1.7 billion), in 1984. This department is most well known for its specialty foods, high-quality prepared dishes, fresh fruits, yogurts, and creams.
The housewares division is Marks's fastest-growing section, with sales expected to rise 25 percent this year. It is continually introducing new products, including bedding and furniture for the garden and kitchen.
The company is also opening specialist stores, some of which offer only children's clothes, and it also hopes to open next year in a few shopping malls. Marks is also planning to advertise for the first time in its history, and it has hired a financial public relations company. It recently started offering its own credit card service.
Because it plans to put its resources into innovations in Britain, Marks has no immediate intention to expand its overseas stores. It initially had a difficult time with its forays into Europe, and its Canadian operation has only recently turned slightly profitable, says John Hatherly, an analyst at Capel Cure Myers.
These developments are not expected to give the chain a bigger share of the market. Rather, they demonstrate that even such an institution as Marks has to move with the times to retain its position.