It's been a tough 12 months in traditional UK retail. Shops are closing, chains are pulling back, staff are losing their jobs. A combination of economic headwinds accompanied by punishing business rates and taxes, globalisation, not to mention suffocating red tape, are making life for many High Street operators increasingly difficult, if not impossible.
Amid the gloom there is one bright, shining star. M&S is dramatic proof that not all is lost – and provides startling evidence that recovery is possible.
M&S’s recent half-year results reported a 17.2 rise in pre-tax profits, to £407.8 million. Sales climbed 5.8 per cent to £6.52 billion. Food sales jumped 8.1 per cent and operating profit in the division climbed by 34.5 per cent to £213.1 million. M&S’s clothing and home sales increased 4.7 per cent and profits were higher at £242.2 million.
Separately, data from market analysts revealed M&S enjoying stronger growth in groceries than any other supermarket. Kantar’s research disclosed M&S recording the highest sales increase among the grocers, with a year-on-year surge of 11 per cent. Fellow middle-market operator, Waitrose, saw a 1 per cent increase, ahead of Asda and the Co-op.
For anyone who has followed the fortunes of M&S over the past decades this is a remarkable, scarcely believable, transformation. Time was when the chain was the heavyweight for others to aspire to, the undisputed champion and bellwether for the state of Britain’s High Street. Then, a long decline followed.
Chairmen and chief executives came and went, changes of direction were attempted and failed. Customers, suppliers, investors were despairing. M&S clothes became the subject of ridicule, the label a byword for tired and frumpy. The firm was constantly beset with stock issues so that shoppers complained of having piles of shirts, say, in one size but crucially not in theirs.
For anyone who has followed the fortunes of M&S over the past decades this is a remarkable, scarcely believable, transformation
The group went from being best in class to a laughing stock. Branches were closed and there was a sense of no way back. Today, that outlook is overturned. Far from dead and buried, M&S is very much alive and thriving, and it’s showing that with the right management and formula, “legacy” retailers can have a promising future.
For that, M&S and its chairman Archie Norman deserve this year’s business accolades. No question.
The turnaround can be dated to Norman’s arrival in 2017. The genius behind the ascent of Asda, Norman’s return to a sector he once bestrode marked the beginning of the fightback. At Asda – today struggling dreadfully but hopeful with a new chief, Allan Leighton, himself a Norman disciple from the Asda days – Norman displayed an extraordinary ability to motivate, recruit well and rather than presume, to listen to and trust consumers on what they actually wanted.
That was replicated at M&S. Norman’s eye for detail saw everything move up several gears. Stores received brighter decor, lighting and signage. Their layouts became sleeker and no longer sprawling.
His direct and dynamic management style was a breath of fresh air in an organisation that had come to resemble a branch of the civil service, with layers of stifling bureaucracy, stuck in its ways, forever harking back to a glorious past with no obvious route forward.
Board meetings, which used to be ponderous affairs, were over quickly, with directors standing up to save time. Norman gave strong support to chief executive Steve Rowe and then to his successor, Stuart Machin. A key appointment as well was Richard Price, in charge of clothing and home.
Rowe, followed by Machin, embodied a different, fresher M&S. With Norman’s encouragement, a switch was flicked. Instead of cutting costs and penny pinching, M&S invested out of trouble. “If in doubt, add quality” was the mantra.
In fashion, Price was given what many thought was a hospital pass – to make women, and men, but mostly women, choose M&S. There was a third, critical job hire, also in fashion: the recruiting of Maddy Evans from Topshop. Evans was initially given the buying brief, today she runs womenswear.
Evans joined just when profits had fallen 17 per cent and the once mighty M&S suffered the ignominy of being demoted from the FTSE100. Friends, family and business contacts would ask her: “Can you just make it work? Can you make product that I want to wear?” As Norman said when he took over: “The M&S core customer was seen as someone who no longer wanted to look stylish.”
Evans made it her first task to figure out who the M&S customer was – who it ought to be. She defined this ideal as the “modern mainstream”. It was a woman “who is not at the bleeding edge of fashion, but does she want to be considered modern? Yes. Does she feel like she’s relevant in terms of what she’s got on and what her friends might be wearing as well? And does the product need to give her confidence and feel stylish? Absolutely”.
Uniquely today, that approach finds M&S appealing to both mothers and their Gen Z daughters. Evans, put simply, is giving the different age bands what they desire: great looking, on-trend (often in collaboration with designers and celebrities), easy-to-care-for clothes at the right price.
Norman broke down internal structural barriers. Previously, M&S was run as two distinct businesses: fashion and food. They would coexist inside the same premises, but appeal to different audiences.
Those buying the clothes were older and tended to be less affluent than those at the food counters. He brought them together, so younger people with money were drawn to M&S clothing as well as food.
While other chains moved to out-of-town centres with free parking, M&S was hamstrung by its estate of in-town, smaller stores. Norman was tough, ignoring howls of protest from locals, and shut underperforming branches in favour of new, bigger, purpose-built locations affording easy access and car parks, alongside other family-oriented brands on the same site. Now, 18 out of M&S’s top 20 shops are in retail parks.
M&S finally got online to work. It’s not perfect – the partnership with Ocado has issues but it is getting there. Gone too, thanks to a boosted IT and logistics operation, are the perennial M&S travails of overstocking some products and understocking others.
Timing has helped. As many of its peers, among them Debenhams, BHS, Littlewoods, Arcadia, Asda and Waitrose, have suffered and, in some cases, vanished, M&S has raised its game, boldly and unapologetically stepping on to their ground. Some may argue their plight is the reason for M&S’s success, but M&S was itself in great danger of heading for oblivion. The fact that that has not happened and the reverse has occurred is down to Norman and the senior team.
Their achievement is extraordinary. M&S really was that apocryphal supertanker. Norman wrested the controls and turned it around.
Machin hails “the beginning of a new M&S”. It certainly feels like that. The old, with its baggage of historical success and then problems galore, appears well and truly discarded.
It’s still a difficult challenge. Retailing is a fickle business and the reborn M&S must continue giving customers what they desire. Having got this far, M&S must not let go. Asda and that firm’s woes, post-Norman, afford a stark reminder of how fortunes can turn.
Global state-owned investor ranking by size
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Japan
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Groom and Two Brides
Director: Elie Semaan
Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla
Rating: 3/5
Omar Yabroudi's factfile
Born: October 20, 1989, Sharjah
Education: Bachelor of Science and Football, Liverpool John Moores University
2010: Accrington Stanley FC, internship
2010-2012: Crystal Palace, performance analyst with U-18 academy
2012-2015: Barnet FC, first-team performance analyst/head of recruitment
2015-2017: Nottingham Forest, head of recruitment
2018-present: Crystal Palace, player recruitment manager
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PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
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COMPANY%20PROFILE
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The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Brief scoreline
Switzerland 0
England 0
Result: England win 6-5 on penalties
Man of the Match: Trent Alexander-Arnold (England)
White hydrogen: Naturally occurring hydrogen
Chromite: Hard, metallic mineral containing iron oxide and chromium oxide
Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content
Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
Tips for newlyweds to better manage finances
All couples are unique and have to create a financial blueprint that is most suitable for their relationship, says Vijay Valecha, chief investment officer at Century Financial. He offers his top five tips for couples to better manage their finances.
Discuss your assets and debts: When married, it’s important to understand each other’s personal financial situation. It’s necessary to know upfront what each party brings to the table, as debts and assets affect spending habits and joint loan qualifications. Discussing all aspects of their finances as a couple prevents anyone from being blindsided later.
Decide on the financial/saving goals: Spouses should independently list their top goals and share their lists with one another to shape a joint plan. Writing down clear goals will help them determine how much to save each month, how much to put aside for short-term goals, and how they will reach their long-term financial goals.
Set a budget: A budget can keep the couple be mindful of their income and expenses. With a monthly budget, couples will know exactly how much they can spend in a category each month, how much they have to work with and what spending areas need to be evaluated.
Decide who manages what: When it comes to handling finances, it’s a good idea to decide who manages what. For example, one person might take on the day-to-day bills, while the other tackles long-term investments and retirement plans.
Money date nights: Talking about money should be a healthy, ongoing conversation and couples should not wait for something to go wrong. They should set time aside every month to talk about future financial decisions and see the progress they’ve made together towards accomplishing their goals.
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UAE currency: the story behind the money in your pockets
The specs
Engine: 2.0-litre 4-cyl, 48V hybrid
Transmission: eight-speed automatic
Power: 325bhp
Torque: 450Nm
Price: Dh289,000
Find the right policy for you
Don’t wait until the week you fly to sign up for insurance – get it when you book your trip. Insurance covers you for cancellation and anything else that can go wrong before you leave.
Some insurers, such as World Nomads, allow you to book once you are travelling – but, as Mr Mohammed found out, pre-existing medical conditions are not covered.
Check your credit card before booking insurance to see if you have any travel insurance as a benefit – most UAE banks, such as Emirates NBD, First Abu Dhabi Bank and Abu Dhabi Islamic Bank, have cards that throw in insurance as part of their package. But read the fine print – they may only cover emergencies while you’re travelling, not cancellation before a trip.
Pre-existing medical conditions such as a heart condition, diabetes, epilepsy and even asthma may not be included as standard. Again, check the terms, exclusions and limitations of any insurance carefully.
If you want trip cancellation or curtailment, baggage loss or delay covered, you may need a higher-grade plan, says Ambareen Musa of Souqalmal.com. Decide how much coverage you need for emergency medical expenses or personal liability. Premium insurance packages give up to $1 million (Dh3.7m) in each category, Ms Musa adds.
Don’t wait for days to call your insurer if you need to make a claim. You may be required to notify them within 72 hours. Gather together all receipts, emails and reports to prove that you paid for something, that you didn’t use it and that you did not get reimbursed.
Finally, consider optional extras you may need, says Sarah Pickford of Travel Counsellors, such as a winter sports holiday. Also ensure all individuals can travel independently on that cover, she adds. And remember: “Cheap isn’t necessarily best.”
Terror attacks in Paris, November 13, 2015
- At 9.16pm, three suicide attackers killed one person outside the Atade de France during a foootball match between France and Germany
- At 9.25pm, three attackers opened fire on restaurants and cafes over 20 minutes, killing 39 people
- Shortly after 9.40pm, three other attackers launched a three-hour raid on the Bataclan, in which 1,500 people had gathered to watch a rock concert. In total, 90 people were killed
- Salah Abdeslam, the only survivor of the terrorists, did not directly participate in the attacks, thought to be due to a technical glitch in his suicide vest
- He fled to Belgium and was involved in attacks on Brussels in March 2016. He is serving a life sentence in France
Who has lived at The Bishops Avenue?
- George Sainsbury of the supermarket dynasty, sugar magnate William Park Lyle and actress Dame Gracie Fields were residents in the 1930s when the street was only known as ‘Millionaires’ Row’.
- Then came the international super rich, including the last king of Greece, Constantine II, the Sultan of Brunei and Indian steel magnate Lakshmi Mittal who was at one point ranked the third richest person in the world.
- Turkish tycoon Halis Torprak sold his mansion for £50m in 2008 after spending just two days there. The House of Saud sold 10 properties on the road in 2013 for almost £80m.
- Other residents have included Iraqi businessman Nemir Kirdar, singer Ariana Grande, holiday camp impresario Sir Billy Butlin, businessman Asil Nadir, Paul McCartney’s former wife Heather Mills.
Hunting park to luxury living
- Land was originally the Bishop of London's hunting park, hence the name
- The road was laid out in the mid 19th Century, meandering through woodland and farmland
- Its earliest houses at the turn of the 20th Century were substantial detached properties with extensive grounds
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
The five pillars of Islam
Read more about the coronavirus
Profile
Company: Justmop.com
Date started: December 2015
Founders: Kerem Kuyucu and Cagatay Ozcan
Sector: Technology and home services
Based: Jumeirah Lake Towers, Dubai
Size: 55 employees and 100,000 cleaning requests a month
Funding: The company’s investors include Collective Spark, Faith Capital Holding, Oak Capital, VentureFriends, and 500 Startups.
All Black 39-12 British & Irish Lions
