How do you solve a problem like M&S: What Steve Rowe is pledging to do to fix Marks & Spencer
Another day, another set of terrible results for Marks & Spencer, which this morning revealed pre-tax profits had slumped by almost a fifth over the last year.
As with every other update in the last four or five years, the retailer experienced strong sales in food and a disappointing in clothing.
But unlike other results, today's figures come with a new man in charge and a new plan in place to fix the problems. So what is Steve Rowe actually planning to do about M&S? Here are the key takeaways from his new strategy.
Out of fashion
Rowe has recognised what Marc Bolland never could: that M&S' core customer is not a flighty slave to fashion, but someone who wants to wear clothes that actually suit their bodies.
The new strategy acknowledges this point precisely, saying that instead of following trends it will focus on "wearable, contemporary style and unbeatable wardrobe essentials".
Our customers look to M&S not for fashion trends but for accessible products they can wear with confidence. This will be complemented by a refocus on stylish everyday essentials, which we will continually refresh to ensure they are current and competitive, and underpinned by standout M&S innovation.
Wave bye bye pink coats and collaborations with the likes of Alexa Chung, which the vast majority of people can't or won't wear, and say hello to flattering staples that M&S used to do so well? Let's hope.
Quality has also been flagged up as critical. Although this was supposedly addressed under Bolland, many customers continued to complain that clothes didn't fit properly, didn't last long enough and were simply not answering their problems. Rowe says M&S will deliver this through "fabric, fit and finish".
Sales set sail
Rowe has no doubt taken a look at rival Next and seen just how well it is performing relatively.
While Next has just two – clearly marked – sales a year, M&S has followed the Debenhams' approach of offering promotions randomly throughout the year, which serves to annoy customers who had bought at full price and put them off doing so in future, in favour of holding out for a bargain.
But, as we have seen in the supermarket sector, Rowe is planning to banish deals in favour of "everyday prices".
We have been too reliant on promotions and sales which has eroded our value credentials. We will significantly reduce promotions and have fewer but better clearance sales in order to rebuild trust in our pricing stance. We will be more targeted in our promotions, leveraging data from our Sparks card customers, and offer fewer channel-specific promotions.
Customer what?
It's not surprising that the man who started out as a Saturday boy in his local Croydon branch wants to address one of the major bugbears of M&S' customers and staff alike – the experience.
He plans to do this by cutting back the number of brands and the number of items on sale, making it less confusing for customers to browse (and presumably for staff to find items for their customers). He is also planning to address availability, following the many complaints that the clothes are never in the right sizes.
Staff are central to this, and M&S has pledged to invest in the team – and will also expand it.
We will improve standards and offer better service by investing in more employees in our stores and improving our instore facilities. Some basic changes to the environment, coupled with great service, can turn a shopping trip into an experience.
Set your stores
Despite an apparent store refurbishment programme under the previous regime, M&S store portfolio is in desperate need of improvement.
As well as improving the ease with which a customer can actually find clothes by the earlier points, Rowe is also planning to introduce "selective and impactful outfit merchandising, which will give us more flexibility to trade the seasons and trends".
Our customers also want real choice and we will provide this by carefully tailoring our ranges to the location of the store and the mission of the shopper. This will enable us to stock more of our new innovative products in smaller stores, as well as help manage cost of waste.
Anything else?
M&S has acknowledged it will take a long time for the many issues to be resolved.
It said this morning:
Recovering our clothing and home business won’t happen overnight. It will take time for customers to notice the improvements we are making and change their shopping behaviour, but we are confident that our commitment to delivering the right product, price and service will help return clothing and home sales to growth.
Although Rowe has given a decent level of insight into his plans, there is still plenty of detail missing – and there will be more to come next month:
There are many areas of our business that we are still reviewing. In the autumn we will report back on plans for our UK store portfolio, the shape of our international business and our organisation. We will update on our first quarter sales on 7 July 2016.
Initial thoughts?
Analysts are not overwhelmed, having heard similar promises made by Bolland. There are concerns that things have got so bad at M&S that the team has forgotten who "the M&S customer" actually is – despite the fact that she is the centre of Rowe's strategy.
Investors were similarly unimpressed: Marks & Spencer's share price was down 8.3 per cent in early trading.