Marks & Spencer : Signs of Revival?

Marks & Spencer reported its best sales figures for three years for the 12 weeks to the end of September 2001. The chain store revealed that it had achieved a 0.8% improvement in sales of clothing, footwear and gifts A strict comparison with the same period of 2000 is difficult because of the fuel strike which caused consumers to stay at home rather than shop. M&S quantified this advantage at 2.6% meaning that sales in this category were actually down 1.8%. But this is far better than the 9.1% downturn in the first quarter of 2001 and financial experts' forecasts of a 7% fall in sales.

To add to the good news were the rise in food sales (which account for 45% of the business), of 4.9% and the 6.6% improvement in sales of homewares.

The sales of clothing included only two days contribution from the new Per Una range supplied by the successful fashion retail entrepreneur George Davies. Initial indications are that the new range is selling well. The Per Una range targets 18 to 35 year old fashion-conscious women. It is sold in special concessions within M&S stores and bags carry the Per Una logo. George Davies, who launched the successful Next retail chain in the UK and created the value for money George range for the supermarket chain Asda, retains the rights to the Per Una range and has personally invested £21m in setting up the range.

For the more traditional M&S customer - middle income and 35+ - a new basic range called Perfect is designed to give what these consumers want: classic, stylish basics in high quality fabrics at reasonable prices. Examples include well-cut white shirts, soft black jumpers that will go through the wash, and jeans that never lose their shape. Sales are encouraging. At the more up-market fashionable end of the market is the Autograph range which has met with only limited success with some observers commenting that at designer label prices many shoppers prefer authentic designer labels. The range sells in only 25 stores with no plans to expand its availability at the moment.

M&S once prided itself on its reluctance to advertise. This changed in 2000 with a television advertisement featuring a size 16 woman running a hill, taking her clothes off and proclaiming 'I'm normal'. The objective was to persuade the average British woman that she could find clothes in M&S that would be suitable for her. Unfortunately the effect was to make the firm appear old fashioned.

Having learned from this mistake the Xmas 2001 campaign featured high profile celebrities tailored to appeal to distinct target segments. There was DJ Zoe Ball for the aspirational, trendy twenties and thirties, actress Honor Blackman for the older, traditional female shopper, sportsmen Sir Steve Redgrave and George Best for the straight men and Julian Clary for the pink pound.

The stores are changing, too, with major nationwide revamps, the opening of smaller food and clothing stores on the high street and at railway stations. Notable is the opening of Simply Food convenience stores which target commuters on their way to and from work.

Based in: Arlidge, J. and S. Ryle (2001) The Empire's New Clothes, The Observer, 18 November, 22; Finch, J. (2001) M&S Stem the Slide, The Guardian, 10 October, 25; Mathiason, N. (2001) Dark Clouds Lift for Man on Mission Impossible, The Observer, 11 November, 7; Singh, S. (2001) Wide of the Mark, Marketing Week, 4 October, 25-27.