Marks and Spencer is investing GBP900m in overhauling the company

Marks and Spencer is investing GBP900m in overhauling the company

UK retailer Marks and Spencer announced plans today (9 November) to invest GBP850-900m (US$1.3-1.4bn) in overhauling its UK business and developing its international operations.

Six months after taking up the role, CEO Marc Bolland has announced the results of a strategic review that will mean an aggressvie international push as well as an overhaul of its UK operations.

In the UK, the company plans to increase its floor space in the UK and redesign existing outlets, with the aim of increasing revenue by GBP1.5bn by 2013/14.

The company plans to better utilise the space in its food hall, with plans to increase its range from 7,000 to 8,000 SKUs.

Additionally, Bolland plans to scale back the retailer's branded food offer, reducing the range from around 400 products down to around 100. In food, M&S plans to focus on "developing products unique to M&S and characterised by superb eating quality".

While there have been analyst murmurs that M&S would consider moving into online grocery retail, Bolland has quashed any suggestions of an immediate move into the channel.

While the company plans to grow its "existing wine, flower and 'food to order business' from GBP80m to GBP150m by 2013/14, it continues to "evaluate a full online food offer" but does "not intend to build that capability at present".

The retailer is now targeting GBP800m to GBP1bn in international sales by 2013/14, with plans to "become a more international retailer" and reduce its dependency on the UK. While there was no confirmation of plans to return to western Europe, M&S said that instead of "planting flags" it aims to build a "leadership position in priority markets" such as Turkey and the Czech Republic.

Shares in UK retailer Marks & Spencer fell 1.84% in early trading this morning to 405.6p at 9:00 GMT as the City digested the plans.

For the first half ended 2 October, profit before tax and property disposals was up 13.7% to GBP348.6m, while sales were up 5.4% to GBP4.6bn.

Its food operations posted a 4.1% increase in sales, and were up 2.6% on a like-for-like basis.

For the retailer's full earnings statement click here. Check back later for further insight into the company's strategic review.