Marks & Spencer made a crazy bet on a brown suede skirt to save its business - it's failing miserably
Marks & Spencer
That's no small problem: M&S has 1,330 stores worldwide and £10.3 billion ($16 billion) in global annual revenue.
Three months ago we were writing about the brown suede skirt that was going to save Marks & Spencer, the stalwart of Britain's High Street that has fallen on hard times in recent years.
M&S called it "iconic" and the "skirt of the season." Alexa Chung wore it, fashion magazines wrote about it, and M&S even made the skirt its own website. The retailer said there was high demand for it before it had even launched.
But that was three months ago. Now we know that in the quarter when the skirt actually went on sale, clothing sales shrunk again and on Friday the man in charge of the division quit, reportedly because he's lost faith in M&S' management.
At M&S's annual meeting earlier this month, CEO Marc Bolland defended the skirt, "The suede skirt has been very successful for us," he said. The headline from that meeting however, was triggered by Muriel Conway, a former M&S designer for 25 years who retired in the 1990s, who said at the same meeting: "I could weep when I see what is in stores today. Where is the originality? The flair? the newness? The good taste?"
It's also worth asking why M&S launched a long, dark, leather skirt into the summer season, when women are generally looking for shorter, lighter wear.
The skirt had to sell well - when it was first unveiled, M&S had just had its first quarter of growth in clothing sales for 14 quarters. In other words, clothing sales, once the backbone of the iconic British business, had been falling for three and a half years. Things looked like they were starting to get back on track.
It didn't continue.
M&S - which has more than 1,300 stores worldwide - has been quietly closing stores all over the UK:
- Nine shops in June.
- Another in Stevenage.
- Hounslow - gone after 80 years in business.
- Erdington, no more.
The big problem M&S has is people think their clothing is old fashioned. The retailer clothed a generation of Brits and was particularly popular with women - it was the go-to shop for bras and pants.
But the generation that grew up with M&S is getting older, and younger generations aren't replacing them at the tills. Marks & Spencer is seen these days as the shop for grannies.
M&S knows this and has desperately been trying to fix its image problem. It has run high-profile ad campaigns featuring celebrities like Rita Ora, Annie Lennox, and Emma Thompson, shot by Vogue photographer Annie Leibovitz.
Marks & Spencer
(The campaign also reminded younger women of M&S's age problem: Thompson and Lennox are awesome people but their heyday occurred when today's university students were toddlers.)
None of this is working.
Bolland needs to come up with a solution quickly. He has been in the job for five years and for most of that time people have been writing about him being "under pressure" because of falling clothing sales - and often overall sales. The sales keep falling but he's still in a job, much to the incredulity of the financial press. It's got so bad that investors just expect a terrible performance and M&S shares now rise when a fall in sales isn't as bad as expected.
Bolland is now turning to Steve Rowe to rescue clothing and, possibly, his career. Rowe has been running M&S' food division (it also has a chain of posh supermarkets across the UK). This arm of the company has been one of the few bright spots recently, with sales trending upwards.
Bolland will be hoping Rowe can work his magic on the general merchandise division. And so too will most of Britain. Marks & Spencer is one of the few brands you'd call genuinely iconic in the UK - everyone knows it and most people have a soft spot for it.
But if Rowe can't turn things around, M&S investors could be in for another tough few years and we could see fewer Marks & Spencers on High Streets across the country.
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