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Marks & Spencer confident on turnaround

by LLB Editor
26th May 21 11:00 am

Marks & Spencer’s full year results are easy to interpret. The retailer smashed it with food sales, but clothing was a flop as the working from home trend caused a slump in suit sales and the nation no doubt decided it didn’t need to buy any of its pastel-coloured jumpers.

The company seems to be hoping that 2021 will be a turning point (just like each of the previous years and their turning points, given its eternal turnaround programme).

The retailer is betting its fortunes on a permanent shift in the type of clothes people want. So smart suits and tailoring services are going to be downsized in favour of giving more floor space to athleisure items, children’s clothes and more smart casual items for those who do return to the office.

“Part of that shift will put it in more direct competition with Next, which itself has made the smart move of selling third party products on its website as well as its own goods, thereby giving customers broader choice. Marks & Spencer will therefore need to excel on its product choices if it is to gain market share,” said Russ Mould from AJ Bell.

“If this new push with clothes is unsuccessful, it will no doubt raise the question once again as to whether Marks & Spencer would be better off focusing purely on food. It wouldn’t be easy to sell the clothing and homewares arm because of the shared floor space with food in so many stores, plus there can’t be many businesses who would want to take on additional property. Therefore, it has to make the new clothing strategy work.”

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