Thursday, 1 February 2018
Marks and Spencer and legacy retailing
Online, M&S is enjoying growth increases--but results are not as strong as some analysts had hoped.
Competition from other legacy retailers, as well as competition from online merchants, is causing M&S to make changes to its offline strategy. One issue the retailer is addressing is how many stores it really needs. M&S is planning to close up to 30 of its brick-and-mortar stores in the near future. 'Stores will always be an integral part of our customer experience, alongside M&S.com, but we have to ensure we have the right offer in the right locations', says a company exec.
Looking at the international retail presence, M&S is selling its Hong Kong and Macau retail business as part of its change in strategy. The new owner will retain the M&S brand on store signage as part of the deal.
To keep sales and profits growing, M&S had planned to open dozens of new food stores in its Simply Food chain. But now, after food sales did not meet performance expectations during the key yearend holiday period of 2017, the company is opening fewer stores than originally planned. The company stated that 'headwinds facing our food business have intensified as competitors have encroached on some of our space with the rapid growth of convenience'.