Revamp will be painful, warns boss of M&S as he prepares to slash price of firm's clothes
The new boss of Marks & Spencer has pledged to slash prices and put more staff in stores in a bid to turn around the fortunes of the chain, particularly its beleaguered clothing arm.
Steve Rowe also warned the troubled retailer could take a further hit as he revealed an 18.5% drop in pre-tax profits to £488.8m for the year to April 2.
There was a 4.3% rise in underlying pre-tax profits to £689.6m, but bottom-line profits slumped because of one-off costs of more than £200m, including around £50m from payment protection insurance mis-selling at M&S Bank
The company, which employs around 2,600 people across Northern Ireland in eight full-owned Simply Food stores and 10 locations selling clothes and other lines, also announced a review of its store estate, the findings of which will be published in the autumn.
As part of Mr Rowe's overhaul, thousands of store staff at Marks & Spencer will see wages hiked by around 15%, while others will see pay for Sunday and night shifts reduced.
The group said the investment in the wide-ranging revamp, in addition to tough conditions on the high street, would "have an adverse effect on profit in the short-term".
Mr Rowe also said his clothing overhaul will see the group reduce everyday prices and cut back on promotions and clearance sales.
The chief executive told Radio 4's Today programme that the group had identified its core customer base.
"We've got a very clear idea who our customer is - and Mrs M&S, we need to cherish and celebrate her and make sure we're giving her exactly what she needs at the right time," he said.
However, it is understood that any new clothes lines will remain focused on quality through "fabric, fit and finish".
The group also plans to "re-establish its style authority", with a focus on fashionable wardrobe essentials to win back customers.
It will also reduce the number of product lines in its autumn/winter ranges.
Retail expert Donald McFetridge said Mr Rowe was showing determination in his approach.
"He vows that he now knows who Mrs M&S is, which rather begs the question, did his predecessors not have this valuable information to hand?" he asked.
He also claimed that Mr Rowe needed to take a more back-to-basics approach.
"He needs to get his marketing department to carry out some old-fashioned focus groups and really listen to what he hears, even if it's not music to his ears," Mr McFetridge said.
"Retailers like M&S have failed to do this well enough in order to please Mrs M&S.
"Right now, he has a golden opportunity if he is going to be the one to change the downward spiral in clothing in which M&S now finds itself.
"M&S advertisements are stylish and creative - it's time their clothing followed through on the promises from their advertising and marketing departments and got the right product to the right place at the right price.
"Old-fashioned rules of commerce still have value - even in the retail marketplace."