Marks & Spencer
2008/9 Schools Wikipedia Selection. Related subjects: Companies
| Marks & Spencer | |
|---|---|
 |
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| Type | Public (LSE: MKS) |
| Founded | Leeds, England (1884) |
| Headquarters | London, England, UK |
| Key people | Michael Marks, co-founder Thomas Spencer, co-founder Sir Stuart Rose, Chief Executive |
| Industry | Retailer |
| Products | Clothing, food, household items, coffee shop, furniture, technology |
| Revenue | ▲ £7.798 billion GBP ( 2006) |
| Operating income | ▲ £0.746 billion GBP ( 2006) |
| Net income | ▲ £0.521 billion GBP ( 2006) |
| Employees | 70,550 |
| Website | www.marksandspencer.com |
Marks & Spencer (M&S) is a British retailer, with 760 stores in more than 30 countries around the world. It is one of the most iconic and widely recognised chain stores in the UK with 520 stores, and is the largest clothing retailer in the country, as well as being a multi-billion pound food retailer. Most of its shops sell both of these categories. It also has a third line of business selling homewares such as bed linen, but this is far smaller than the other two.
In 1998 it became the first British retailer to make a pre-tax profit of over £1 billion, though a few years later it plunged into a crisis which lasted for several years. As of 2007, it is growing again and rapidly increasing profitability.
History
Early years (1884 onwards)
The site of the first stall is marked with a green and gold commemorative clock in Leeds Kirkgate Market. One of the original Penny Bazaars - in the Grainger Market, Newcastle upon Tyne - remains open to this day, and is now the smallest Marks & Spencer store in operation.
20th century
M&S made its reputation in the 20th century on a policy of only selling British-made goods. It entered into long term relationships with British manufacturers, and sold the goods under the "St Michael" brand (trademark registered in 1928), which was used for both clothes and food. It also accepted the return of unwanted goods, giving a full cash refund if the receipt was shown, no matter how long ago the product was purchased. It has now adopted a 90-day returns policy.
Unlike most of its rivals M&S resisted the lure of television advertising when ITV was launched in 1955, preferring to rely on its reputation to draw in customers. It was not until the mid-1990s that the first TV commercials for M&S clothing were broadcast.
By 1956, all goods were sold under the St Michael label. In 1964, Simon Marks died after 56 years' service to the Company, and Israel Sieff took over as Chairman. In 1974, Asian food was introduced into the stores. M&S opened up stores in continental Europe in 1975, then four years later in Ireland.
The company put its main emphasis on quality, but for most of its history, it also had a reputation for offering fair value for money. When this reputation began to waver, it encountered serious difficulties. Arguably, M&S has historically been an iconic retailer of 'British Quality Goods'. Its business model required suppliers to commit to long term contracts solely with M&S. This approach often led to over-reliance by manufacturers on the portion of trade they did with M&S. Accordingly, when the M&S fashion buyers changed suppliers on some aspects of the company's retail clothing offering, manufacturers were left dangerously exposed — many became insolvent. This has resulted in a change of climate, and no longer is a contract to supply M&S held up as the panacea it once was.
In 1988, as the company acquired Brooks Brothers, an American clothing company and Kings Super Markets, a US food chain. Both have subsequently been sold off in 2001 and 2006 respectively.
1997 onwards
M&S's profits peaked in financial year 1997/1998. At the time it was seen as a continuing success story, but with hindsight it is considered that during Sir Richard Greenbury's tenure as head of the company, profit margins were pushed to untenable levels, and the loyalty of its customers was seriously eroded. The rising cost of using British suppliers was also a burden, as rival retailers increasingly imported their goods from low-cost countries, but M&S's belated switch to overseas suppliers undermined a core part of its appeal to the public. Another factor was the company's refusal to accept any credit cards except its own store card. In addition, as an ageing and famously bureaucratic company, it was losing touch with potential younger customers, who were reluctant to shop with it.
These factors combined to plunge M&S into a sudden slump, which took the company, its shareholders, who included hundreds of thousands of small investors, and nearly all retail analysts and business journalists, by surprise. The company's share price fell by more than two thirds, and its profits fell from more than a billion pounds in 1997 and 1998 to £145 million in the year ended 31 March 2001.
Since the late 1990s M&S has experienced serious boardroom instability and has made a number of attempts to revive its business, with only partial success. By 1999, Online Shopping was brought in, and the company grew with new sales of fashion clothing. In 2001, with changes in its business focus such as the introduction of the "Per Una" clothing range designed by George Davies, accompanied by a redesign of its underlying business model, profits recovered somewhat and M&S recovered some of its market share, but it soon became apparent that problems remained. Other changes to tradition included accepting credit cards and opening its stores on Sunday.
In 2004, M&S was in the throes of an attempted takeover by Arcadia Group & Bhs boss, Philip Green. On July 12 a recovery plan was announced which would involve selling off the financial services business to HSBC Bank plc, buying control of the Per Una range, closing the Gateshead Lifestore and stopping the expansion of its Simply Food line of stores. Philip Green withdrew his takeover bid after failing to get sufficient backing from shareholders. Philip Green's offer to the shareholders in 2004 of £4 a share, has been recently made to look feeble by M&S's current revival. Since June 2005 the share price has almost doubled from 319p a share to a high of 766 in May 2007.
Chairmen
- 1884-1907: Michael Marks (set up first stall in Leeds in 1884)
- 1907-1916: William Chapman.
- 1916-1964: Simon Marks (Lord Marks)
- 1964-1967: Israel Sieff (Lord Sieff)
- 1967-1972: Edward Sieff
- 1972-1984: Marcus Sieff (Lord Sieff)
- 1984-1991: Derek Rayner (Lord Rayner)
- 1991-1999: Sir Richard Greenbury
- 2000-2004: Luc Vandevelde
- 2004-2006: Paul Myners
- 2006-present: Lord Burns
Financial performance
Until 1999 M&S's financial year ended on 31 March. Since then, the company has changed to reporting for 52 or 53 week periods, ending on variable dates.
| Year ended | Turnover (£ M) | Profit before tax (£ M) | Net profit (£ M) | Basic eps (p) |
|---|---|---|---|---|
| 1 April 2006 | 7,797.7 | 745.7 | 520.6 | 36.4 |
| 2 April 2005 | 7,490.5 | 505.1 | 355.0 | 29.1 |
| 3 April 2004 | 8,301.5 | 781.6 | 452.3 | 24.2 |
| 29 March 2003 | 8,019.1 | 677.5 | 480.5 | 20.7 |
| 30 March 2002 | 8,135.4 | 335.9 | 153 | 5.4 |
| 31 March 2001 | 8,075.7 | 145.5 | 2.8 | 0.0 |
| 1 April 2000 | 8,195.5 | 417.5 | 258.7 | 9.0 |
| 31 March 1999 | 8,224.0 | 546.1 | 372.1 | 13.0 |
| 31 March 1998 | 8,243.3 | 1,155.0 | 815.9 | 28.6 |
| 31 March 1997 | 7,841.9 | 1,102.1 | 746.6 | 26.7 |
| 31 March 1996 | 7,233.7 | 965.8 | 652.6 | 455.8 |
Corporate social responsibility
In 2006 the Look Behind the Label marketing campaign was introduced . The aim of this campaign was to highlight to customers, the various ethical and environmentally friendly aspects, of the production and sourcing methods engaged in by M&S including: Fairtrade products, sustainable fishing and environmentally friendly textile dyes. All coffee and tea sold in M&S stores is now Fairtrade, in addition the company offers clothing lines made from Fairtrade Cotton in selected departments.
The company is also looking at how stores can be made more environmentally friendly and in particular the materials used when fitting out stores, for example using flooring made from natural rubber. As well as looking to source electricity from environmentally friendly sources.
At Christmas time the company introduces a range of food products to support the housing charity Shelter predominantly in the food to go range including a range of seasonal Christmas sandwiches.
A new store format designed by Urban Salon Architects, has won much praise [citation needed] and is in the process of being rolled out across all stores, with most stores being completed by the end of 2008.
The full new look makeover is a drastic reworking of store design, including the gutting of old stores, and installation of a brighter, more spacious, modern and contemporary design, replacing carpets and laminate floors with white tile throughout (black tile in Foods) thus opening the floor instead of having pathways, having new contemporary white mannequins in new designs and poses, new displays and kit such as new design clothing rails, product stands (formerly known as "Lutons"), display and product walls, window display styles, larger fitting rooms, glass walls, till points, and general total updating of decals, designs, equipment, and lighting.
Several of the 'Luton' format stores have received what is known internally as a 'Light Touch' re-fit, which is a temporary update to interiors in stores which have had recent investment in them, or where stores are in areas that are likely to be subject to re-development
The considerable savings are achieved via a combination of powering the store with green renewable energy, improving air tightness to minimise heat and energy loss and installing more efficient systems and equipment across lighting, refrigeration and heating and ventilation. As well as the 'eco-features', all suppliers who were contracted to the project worked in a 'greener', more efficient way. This included operating a green travel plan for all construction traffic and managing waste materials to ensure that they were recycled where possible. Bournemouth store re-launched on 4 October 2007.
Marketing
In the late 1990s, the St Michael brand was discontinued in favour of Marks & Spencer. When Steve Sharp joined as marketing director in 2004, after being hired by new Chief Executive Sir Stuart Rose, he introduced a new promotional brand under the Your M&S banner, with a corresponding logo . This has now become the company's main brand in its advertising, online presence and in-store merchandising. The clean font (Helvetica) and modern colours of the new image are somewhat incongruous alongside the traditional M&S signage and associated fittings that still adorn many of the stores themselves. In fact the only thing they have in common is the use of M&S traditional green in the ampersand of the new logo. This may seem confusing at first, but the new look has been instrumental in the company's recent resurgence, particularly with the success of a new clothing campaign featuring the celebrated model, Twiggy, and younger models associated with the bohemian styles of 2005-6, and the new TV ad campaign for its food range. These adverts have the tagline "This is not just food, this is M&S food" and feature slow motion, close-up footage of various food products, described in a sultry voiceover by Dervla Kirwan, to an enticing instrumental song such as Santana's ' Samba Pa Ti', Albatross or Groove Armada's 'At The River'. These adverts have been refered to by both fans and critics as being "food porn".
New store format
Marks and Spencer's internet revenue in 2007 was reported as £100m.
A new store format designed by Urban Salon Architects, has won much praise and is in the process of being rolled out across all stores, with most stores being completed by the end of 2008.
The full new look makeover is a drastic reworking of store design, including the gutting of old stores, and installation of a brighter, more spacious, modern and contemporary design, replacing carpets and laminate floors with white tile throughout (black tile in Foods) thus opening the floor instead of having pathways, having new contemporary white mannequins in new designs and poses, new displays and kit such as new design clothing rails, product stands (formerly known as "Lutons"), display and product walls, window display styles, larger fitting rooms, glass walls, till points, and general total updating of decals, designs, equipment, and lighting.
Several of the 'Luton' format stores have received what is known internally as a 'Light Touch' re-fit, which is a temporary update to interiors in stores which have had recent investment in them, or where stores are in areas that are likely to be subject to re-development.
M&S Online
On 23 March 2007, Marks & Spencer made significantly more of its products available online when it launched a new web store in partnership with Amazon, one of the world's largest online retailers. The move supports Sir Stuart Rose's goal of quickly doubling the company's online sales. The site combines Marks & Spencer products, online content and branding with Amazon features such as 'wish lists', '1-click ordering' and 'account management tools'.
In addition, customers can now view their M&S Money account online; allowing them to check their &MORE credit card balance and pay bills.
Self Check-Out Tills
Marks and Spencer introduced self check-out tills in May 2007 within 13 of its flagship stores following the success of an initial three store trial. These self check-out tills allow customers to scan, pack and pay for their own goods by cash or credit cards without the aid of a cashier.
A member of staff is still on hand at all times to offer help and authorise age-restricted sales.
Products
Womenswear Collections
- Autograph
- Autograph Weekend
- Plus Collection
- Petite Collection
- Limited Collection Maternity
- Per Una
- Per Una Petite (Only available online)
- Limited Collection (Larger stores only)
- Classic Collection
- Bridal (Only Available Online and in selected stores)
- Long & Tall (Only Available Online)
From early 2008 Plus and petite departments will be integrated into their standard size departments so that customers can find the type of clothing they are looking for in one area.. However Plus items will be stocked in stores up to size 24 with www.marksandspencer.com stocking sizes 26-30
Per Una
per una is a range of female clothing sold at Marks & Spencer.
Launched on September 28, 2001 as a joint venture between Marks & Spencer and Next founder George Davies. The brand name means for one (woman) in Italian. All Per Una items include the three hearts logo, inspired by a postcard seen by Davies while on holiday in Italy.
Per Una has been a major success for the company , and in October 2004, Marks & Spencer bought the brand in a £125 million, two-year service contract with George Davies.
Menswear
- Blue Harbour - Britain's largest men's casual brand
- Blue Harbour Golf - Specific range dedicated to golf, only available in larger stores
- Autograph - From the designers Nigel Hall and Jeffery West
- Collezione - Italian inspired clothing
- Stormwear - Water-repellent clothing
- Big & Tall - Only available from marksandspencer.com or instore ordering
Homeware - Technology
In 2006, M&S opened a Technology Department in 13 of its flagship stores. The company also has a wide selection of its Technology goods in some of its other large stores with Home departments.
M&S has recently launched its Summer 2007 Technology Catalogue and has also introduced the M&S laptop installation and technical service. This involves a trained M&S technical advisor visiting a customer's house on purchase of a new laptop from M&S. They set it up for the customer, giving demonstrations and answering questions.
Wine
It was announced in January 2007 that M&S would be sourcing more low-alcohol wines, 12% and below. By the end of 2007, almost all stores, including Simply Food, will have a 'Fine Wines' display fitted into the original shelving unit. This is due to the demand from consumers for more expensive and prestigious wine. These units will display all types of wine and Champagne over ten pounds. 100% of M&S wine is own-brand, and blended exclusively for the company. It can be purchased online, by the case, at often discounted prices.
In 2006 and 2007, Marks and Spencer entered over 100 of its own wines into two wine competitions, The Decanter World Wine Awards and The International Wine Challenge. Both years, almost every wine won an award, ranging from the 2005 Secano Pinot Noir, Leyda Valley, Chile (Best Pinot Noir in the world for under £10) to the Rosada Cava (Commended). This has helped establish Marks and Spencer as a serious competitor in the UK wine market.
Head Office locations
The headquarters of M&S was for many years in Baker Street, London; during World War II these offices were used by the Special Operations Executive for secret missions in Occupied Europe. In 2004 the company moved to a new headquarters in Paddington Basin, London.
As well as the main offices in London, there are a number of other Head Office sites across the UK; Stockley Park (IT Services), Salford Quays (Marks and Spencer Shared Services Ltd which provides HR and Finance Administration to Stores and Head Office), Chester (HSBC's M&S Money) and Retail Customer Services), and Draycott (Per Una).
The company has overseas sourcing offices in Hong Kong, India, Bangladesh, Turkey and Sri Lanka .
Stores
UK & Ireland
M&S have over 520 stores located throughout the UK, providing nearly 1.2 million square metres (12.5 million square feet) of selling space. This includes its largest store located on Oxford Street, near Marble Arch, London, which has around 16,000 square metres (170,000 square feet) of sales floor. Outside London, the next biggest store is located in Warrington and the third largest store is located at Sprucefield Centre in Northern Ireland, which also has it's own homeware only store, the second of which opened in the UK. The fourth largest store will be the forthcoming branch at Silverburn Centre, Pollok in Glasgow which as of 25 Oct 07 becomes the largest Marks and Spencer in Scotland[ ]
In the run up to Christmas 2006 from the 18 - 23 December, a total of 22 Marks and Spencer stores were open for 24 hour trading including the recently opened new retail park stores at Bolton Middlebrook and Abbey Centre Newtownabbey .
M&S Ireland
Marks & Spencer opened its first Irish store on Dublin's Mary Street in 1979 (now part of the Jervis Shopping Centre), then Grafton Street. followed in 1988, Cork in 1989, then in 1996 the Grafton Street location to its present location in the former Brown Thomas store and finally the first out of town store in Liffey Valley in October 1998. There are now 17 Republic of Ireland stores, including three Simply Food stores. There are also 19 stores in the North including two outlet stores in Banbridge and Antrim. The Irish stores use a similar format and product line to the UK stores, including use of the "Your M&S" logo (which at Liffey Valley is the only logo used on exterior signs since a June 2007 refit). Since 2001 M&S have rolled out over 24 stores in Northern Ireland and Ireland, including two Marks and Spencer Outlet stores in Northern Ireland and nine Simply Food stores (6 NI and 3 Ireland).
There is also plans to open more stores this year with some already under construction in Sligo, Limerick and Waterford in the South and Carrickfergus, Enniskillen and Armagh in the North. M&S' largest stores in Ireland are Liffey Valley Shopping Centre located in Lucan/ Clondalkin in South Dublin, Dundrum located in Dundrum Town Centre in Dun Laoghaire-Rathdown, Blanchardstown Town Centre in Fingal and Lisburn Sprucefield located in Sprucefield Retail Park about 11 miles from Belfast. This store is the largest store in Ireland and also the third largest store in the UK, with its own Homeware only store, technology store and 1,500 seat Cafe Revive, also the largest in the UK.
M&S plans to grow the Ireland business "significantly over the next three years", according to its Annual report . On 1 November 2007 its latest store opened in Athlone, County Westmeath at Athlone Town Centre and also in Mullingar in County Westmeath at the fairgreen shopping centre. Like Liffey Valley, this store is branded solely as "M&S" on exterior signage, not "Marks and Spencer".
Store Formats
Simply Food
There are 187 Simply Food stores selling predominantly food with most carrying a small selection of general merchandise. The flagship Simply Food store is that of Llanishen in Cardiff. Chief Executive Sir Stuart Rose has announced plans to expand the number of these stores to a total of 400 .
A number of these stores are run under franchise agreements:
- Select Service Partner (SSP) runs the stores at mainline railway stations and airports
- Moto has stores at several of its motorway service stations
- BP has 11 forecourts with a Simply Food offer
Standalone Home Stores
During 2007, Marks and Spencer have announced the trialling of brand new, solely dedicated stores, in different areas of business, in the hope of rolling them out across the country. Due to be completed, will be a new Your M&S Home Store, in the Barton Square section of The Trafford Centre, to expand the already large store, this store is due to open Good Friday, 2008. Also to open later in 2008, another Your M&S Home store in Tunbridge Wells, Kent. They will both hold the entire homeware range, having a wider selection than any other store, and also house a café and technology section, also to include the white goods range.
The in-store café, M&S Café (formerly Café Revive), has been launched as a standalone cafe in a shopping centre, competing with companies such as Starbucks and Costa Coffee.
Fifty stores across the country are trialling a new home delivery service, where customer assistants take orders from customers and deliver it to their houses, an idea yet to be proved successful.
M&S have also announced it plans to open a technology store, but as yet, no details have been given.
Outlet Stores
Marks and Spencer Outlet Limited is a wholly owned subsidiary, with 32 stores at present and growth expansion plans for future. The Outlet division of Marks & Spencer offers M&S products with the majority of them offering at least a 30% discount from their original high street selling price.
The plan to open Outlet stores was agreed by M&S in 2000 and the first 3 stores opened, as a trial initially, in November 2000. The first store was in the McArthur Glen Outlet Mall in Ashford, Kent on 2nd November 2000.
The first 3 stores were apparently successful as M&S made the decision to open several more in 2001 including the McArthur Glen sites in Swindon, Wiltshire and Bridgend, South Wales and also the Lowry Outlet Mall in Salford Quays.
Marks & Spencer Outlet product offering includes; womenswear, lingerie, menswear and childrenswear along with home and beauty products.
Recently the company has taken the step of opening stores in locations outside factory outlet centres; both in retail park and high street enivronments. The retail park stores were planned to be branded 'M&S For Less', so as to create a perceived difference with the stores located in outlet centres. However after the first store, Astle Park, opened, it was decided not to continue with the new brand as it confused customers with regards to the returns policy.
In 2004 the first of three Outlet High street stores opened. These stores were originally 'main chain' stores selling the normal M&S product range. Since conversion they continue to offer a full-price food offer but with an Outlet store range of textiles.
International Stores
All international stores are operated under franchise with the exception of the stores in the Republic of Ireland and Hong Kong which remain in company ownership.
There are currently franchise stores located in the following locations:
History of the international business
The expansion into France began with stores opening in Paris at Boulevard Haussmann and Lyon in 1975, followed by a second Paris store at Rosny 2 in 1977. Further expansion into other French and Belgian cities followed into the 1980s. Although the Paris stores remained popular and profitable, the whole of the Western European operation did not fare as well and all the stores were closed in 2001. Branches remain in some European countries, such as the Czech Republic and Malta.
M&S expanded into Canada in 1973, and at one point had 47 stores across Canada. Despite various efforts to improve its image, the chain was never able to move beyond its reputation in Canada as a stodgy retailer, one that catered primarily to senior citizens. The stores in Canada were smaller than British outlets, and did not carry the same selection. In the late 1990s, further efforts were made to modernize the stores and expand the customer base, and unprofitable locations were closed. Nonetheless, the Canadian operations continued to lose money, and the last 38 stores in Canada were closed in 1999.
The first M&S store in central Asia was built in Kabul, Afghanistan in the 1960s. The store was later shut down.
In February 2007, M&S announced the opening of the world’s largest M&S store outside the UK at Dubai Festival City.
Training and development
Customer service training
M&S staff are trained in customer service techniques using a customised programme based around the ' Mary Gober Method'. This is known internally as 'Our Service Style'.
'Our Service Style' is defined as follows "We are friendly, helpful, courteous people, who are knowledgeable and enthusiastic about taking care of our customers".
This definition is derived from principles originally identified by the business in the 1950s as being key to good customer service.
Our Service Style training was originally delivered in large seminars hosted by Mary Gober, which all staff attended. Its delivery to staff continues through in-store coaching and training programmes.
Staff members who have been trained in 'Our Service Style' can sometimes be identified by a brooch/pin of a starfish on their uniform.
Graduate & Trainee Management Scheme
The Marks and Spencer Graduate Scheme was set-up to "fast-track" suitable candidates to Commercial Managers. The applicant can either already be working for Marks and Spencer or can be completely new to the company. The selection procedure is strict and the training is around 12 months in duration, after which point trainees aim to have gathered enough experience to take on Commercial Manager positions. All applicants must apply online through the Marks and Spencer Communication Centre and successfully complete and pass the following psychometric tests to evaluate their suitability for the role. The tests are firstly a Verbal Reasoning test which then, upon success and passing, leads onto a Numerical Reasoning test. If this is successfully passed, the candidate is then required to complete an OPQ (Occupational Personality Questionnaire) which is the final stage of the online selection procedure. All of the tests must be taken within 14 days from the first application, otherwise the application is withdrawn automatically.
Marks & Spencer ranked number 22 in The Times Top 100 Graduate Employers 2006, and rose to 17th in the 2007 publication.