Transformation Takes Time – Is Marks & Spencer back?
Despite the cost-of-living hikes, M&S has been the star performer across UK retail in 2023, outshining rivals with stellar share price gains and a return to the FSTE 100 after a four-year absence.
Today’s 6 monthly profit before tax stood at £360m, up 75% on the same period last year. Of particular note was M&S’s performance in its food category with sales up almost 15% and margin at 4.3%.
M&S is set to open nine new UK stores in November, its biggest-ever store opening month.
What is M&S doing to gain this renewed momentum?
Bold leadership bets: adopting a Chief Executive and Co-Chief Executive structure is not easy to pull off. It requires a clear delineation of responsibilities and sound stewardship from the Chair and Board.
By effectively leveraging the transformation experience at the top, it has enabled M&S to accelerate its turnaround
Whilst commonplace in retail language today, M&S has stated its goal to be the leading omnichannel retailer and adopt a digital-first way of working. I note that their press release states: ‘’ More to do to drive online growth and improve returns on data, digital and technology investment’’
Hiring well to drive a high-performance culture: M&S’s employer brand used to be rooted in long employment tenures and promotions from within. Now two-thirds of its top 150 leaders have been hired in the last 5 years. This illustrates why hiring new blood was so important to turning around a struggling brand.
M&S has 30 million customers across the brand and a strong and valuable UK customer data lake through the combination of the Sparks loyalty programme, M&S.com, the M&S credit card and Ocado.
So good news for sure and congratulations to the leadership team. The investments from transformation take time to provide a return but M&S appears to have stuck to its guns and invested heavily in people.
The question now is how sustainable is this recovery?
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