The iconic British retailer was founded in 1884 by Michael Marks and Thomas Spencer and would come to specialise in selling clothing, home products and food, making its reputation in the early 20th-century with a policy of only selling British-made goods under its “St Michael” tag. In 1998, the company became the first British retailer to make a pre-tax profit of over £1billion, but just one year later those profits were halved, forcing the retailer to belatedly switch to overseas suppliers to cut costs. M&S currently has 959 stores across the UK, but now 615 of those only sell food products, as the company confirms more than 100 clothing stores will have closed by 2022 as part of a new “radical” plan.
Amid the change in structure, Channel 5’s ‘The Fall of M&S: Food to the Rescue’ analysed where things may have started to go wrong for the retailer and whether their new idea could save the day.
Presenter Fiona Philips said in 2019: “In the Eighties, Marks and Spencer was the British retail success story – superior fashion, innovations such as new foods showed they instinctively knew what Middle Britain wanted.
“Now, they’ve hit the buffers, stores are closing and the share price is plummeting, and now bosses think that food could be M&S’ best hope to turn around their fortunes.
“But where did it start to go wrong? M&S had built its reputation through big exclusive deals with British manufacturers, but by the Eighties, competitors had secured overseas suppliers who were both quicker and cheaper.”
Marks and Spencer stuck with British suppliers until 1999
M&S has more recently focused on food
Judi Bevan, author of ‘The Rise and Fall of Marks and Spencer,’ revealed how the warning signs came along in the Eighties, despite the apparent success of Marks and Spencer.
She said: “Next started selling clothes that were aimed at the working woman, but were also fashionable.
“Marks and Spencer had such strong relationships with British suppliers that the idea of sourcing abroad was anathema to them.”
British fashion designer George Davies, who was working with Next at the time, was already sourcing cheaper products from outside the UK, long before it even became an apparent issue.
He told viewers: “I was going abroad because I couldn’t get my supplies in this country and so I’d already, five or six years later, built up a structure of manufacturing all over the world.
Fiona Philips in the Channel 5 show
“They didn’t react fast enough to developing manufacturing partners abroad, they’d been very loyal to the ones in this country, but actually, it’s a different world running abroad.”
Former M&S executive, Peter Ruis, pinpointed this moment as to why he thought the company failed to keep up in the later years.
He said: “Probably the delay in the switch was one of the reasons why M&S could not keep up.
“The British textile industry had fallen behind the rest of the world, customers were not willing to pay the high price that was demanded of using a British supplier in those days.
“It’s a bit like the Roman Empire in the sense, when you’ve been so powerful for so long, that does lead to complacency.”
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British fashion designer George Davies
Mr Davies worked with Next and Asda
Mr Davies launched a second attack on M&S when he spotted an opportunity at Asda in 1989 to sell school clothes at a much more reasonable price than.
He founded a campaign of dressing mannequins in Asda and M&S clothes, demonstrating the lower prices did not mean lower quality, in what was a raging success.
But, despite the warning signs, Ms Bevan explained why Marks and Spencer were still reluctant to make the swap to foreign suppliers, but soon they were hit on all sides by the British retail market.
She said: “In 1997, Marks and Spencer became the first British retailers to make £1billion.
“The problem was that management had pushed the profit margin so hard that the year after, profits halved.
“I think when the very cheap stores like Primark arrived on the scene, it was a real shock to Marks and Spencer because they had felt that they were the purveyors of good value clothing.
Author Judi Bevan on the Channel 5 series
Former M&S chairman Stuart Rose
“And in an unprecedented move, the store allowed George Davies to launch his own brand – Per Una.
“Profits initially went up with glossy adverts helping it sell and after three years, M&S bought out George Davies for £125million.”
The Retail Knowledge Bank conducted an audit of the company’s brands in August 2010, and revealed that sales of womenswear were at a 10-year low.
On November 9, 2010, chief executive Marc Bolland revealed plans to strengthen the company’s overall brand image, which involved the discontinuation of its ‘Portfolio’ fashion brand and the sale of electrical products.
But, on January 7, 2016, it was announced Mr Bolland would step down and be replaced by Steve Rowe, head of clothing.
In 2018, Stuart Machin was appointed Managing Director of Food to lead the transformation of the Food business and the overall direction of the company away from clothing.
M&S core shops now typically feature a selection of the company’s clothing, homeware and beauty ranges and an M&S Foodhall, the range of clothing sold and the space allocated to it depends on the location and customer demographic and in 2019.
But many stores are now standalone Foodhalls and 2019, M&S launched five of these as part of the transformation of the business.