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Split could put end to M&S woes

By Donald C McFetridge

Published 11/01/2016

The news that Marc Bolland is handing over his CEO role at Marks & Spencer to Steve Rowe in April hardly comes as anything of a surprise.

The writing had been on the wall for this for quite some time in spite of the official M&S line that the change in leadership was a result of "succession planning".

Rowe is, not unwittingly, taking on a very tough role at M&S after the company last week reported extremely disappointing results for its general merchandise division, where sales were down 5.8%.

Some are claiming that, as Rowe is very much a hands-on, operational kind of guy, he has all the solutions to problems in general merchandise.

However, it worries me that some experts think the problem with general merchandise is solely an operational matter. Far from it.

Of course, there are issues around identifying and satisfying the consumer demands of their key customers. There are also issues surrounding product design, and there are strategic matters to be sorted out in international markets.

But the real problem is structural, not solely operational. Not only have M&S customers changed, the complete retail environment has changed.

Careful consideration needs to be urgently afforded to the issues of M&S core customer demographics, product design and internationalisation strategies.

But, more fundamentally, I believe that the firm needs to radically rethink its whole approach to the 21st-century retail environment, in which consumers are choosing to shop less frequently with so-called "mixed retailers", such as M&S.

The blurring of retail categories accepted by consumers in the 1980s and 1990s no longer applies. Consumers are demanding clarity from retailers in respect of who they are and what they stand for. This is something M&S needs to address.

The days of buying soup and a suit, or a sandwich and socks, in the same retail outlet are numbered, leading me to respectfully suggest that splitting the operation into two businesses would be one possible option that Rowe might want to consider.

  • Donald C McFetridge is a retail analyst at Ulster University Business School

Belfast Telegraph

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