“Despite the consistent success of its food lines, clothing and general merchandise still accounts for half of M&S’s business – and its seemingly terminal decline has turned it into a giant, profit-sapping albatross around Steve Rowe’s neck,” Ibbotson stated.
“No matter how successful its food offering, there’s something rotten in the state of M&S – rails of clothes that no longer connect with the buying public,” he added.
Hargreaves Lansdown senior analyst Laith Khalaf was also sceptical that M&S’ decision to cut its cloth would allow it to regain lost market share.
“Clothing is a tough game, but food retail is no picnic either,” Khalaf indicated, “with Aldi and Lidl eating up market share, and Amazon lurking in the wings with its new grocery delivery service. However, this is a market where M&S has shown it is able to consistently grow sales, and with premium products on the shelves it is more insulated from the discounters than the likes of Asda and Morrisons.
“It makes sense for the business to go to where the customers are by placing greater emphasis on food, though the sands shift pretty quickly in the retail business, and the best laid plans can go astray.
“The all-important Christmas trading period is just around the corner, though the changes announced today are more long term in nature, and will come with costs attached. It is still therefore a long road ahead for M&S, and it will take some time before we see if these changes revitalise the ailing retailer,” he concluded.
