Stuart Rose, the newly appointed chief executive of food and clothing retailer Marks & Spencer, has unveiled his preliminary plan for the future of the group following an extensive review of operations.
Rose, who was appointed chief executive on 31 May 2004, unveiled a plan to improve the retail performance of the group through various measures including a focus on core customers, better availability and range depth, and a new brand campaign.
He said the plan targeted gross margin benefits and cost savings totalling £250m (US$465.5m) for 2005/06, rising to £320m in 2006/07.
“Marks & Spencer is a great business with a strong brand. Today’s announcement sees us re-focusing on our core retail activities with an emphasis on delivering great product for our 25 million customers. The business has substantial further trading potential, which will be unlocked through a return to the core values of quality, value, service, innovation and trust. Our aim is to give Marks & Spencer back to our customers,” Rose said.
The company plans to launch a new brand campaign, “Your M&S”, in September, aimed at reconnecting with core customers. In the company’s food business the “Your M&S” brand will emphasise quality, freshness, desirability and indulgence.
As part of the company’s plan to focus on the core business of retailing, Marks & Spencer plans to concentrate on its core ranges and its successful sub-brands including per una, Blue Harbour and Simply Food. As a result, the rollout of Simply Food stores with lower projected financial returns has been stopped.
“The successful elements of the Simply Food programme will continue as we look to make our outstanding range of food accessible to a wider audience. The best returns are generated by stores which take over £3m p.a. and are well away from another Marks & Spencer store,” Rose said.
The company also aims to improve its product offering. Rose said the company’s food business has become over complicated with too many sub-brands and product proliferation. M&S has cut 500 lines and will concentrate on quality and real innovation, he added.