on the Analysis of the
Performance and Position of
Table of Contents
3. Financial Performance
4. Social and environmental policy
5. Plan A
7. A New Store Format
10. Head Office Locations
12. Store Formats
13. Senior Management
Marks & Spencer (M&S) is a major British retailer, with over 840 stores in more than 30 countries around the world, over 600 domestic and 285 international. It is the largest clothing retailer in the United Kingdom, as well as being a food retailer, and as of 2008, the 43rd largest retailer in the world. Most of its domestic stores sell both clothing and food, and since the turn of the century it has started expanding into other ranges such as home wares, furniture and technology. In 1998 it became the first British retailer to make a pre-tax profit of over £1 billion, though a few years later it plunged into a crisis which lasted for several years. After fostering significant growth in recent years, mid 2008 has seen share prices plunge, worth well under 50% their value of twelve months before, as M&S struggles to cope with more conservative shoppers amidst the credit crunch. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.
The company was founded by Michael Marks, an immigrant from Minsk (now in Belarus), in 1884 as a single market stall in Leeds. After Thomas Spencer joined the company in 1894 it was known as 'Marks and Spencer'. The site of the first stall is marked with a green and gold commemorative clock in Leeds Kirkgate Market. One of the original Penny Bazaars - in the Grainger Market, Newcastle upon Tyne - remains open to this day, and is now the smallest M&S store in operation. Marks and Spencer, known colloquially as "Marks and Sparks" or "M&S", made its reputation in the 20th century on a policy of only selling British-made goods. It entered into long term relationships with British manufacturers, and sold clothes and food under the "St Michael" brand (trademark registered in 1928), a name which honours its co-founder Michael Marks. It also accepted the return of unwanted items, giving a full cash refund if the receipt was shown, no matter how long ago the product was purchased. It adopted a 90-day returns policy in 2005 but on the 12th of April 2009 the refund policy changed once again to 35 days. This is still the most generous refund period on the British high street.
From 1950 to 1997
By 1950, all goods were sold under the St Michael label. M&S lingerie and girls wear were branded under the "St Margaret" label until the whole range of general merchandise became St Michael. Simon Marks, son of Michael Marks, died in 1964, after 56 years' service to the Company. Israel Sieff took over as Chairman. A cautious international expansion began with the introduction of Asian food in 1974. M&S opened stores in continental Europe in 1975 and in Ireland four years later. The company put its main emphasis on quality, but for most of its history, it also had a reputation for offering fair value for money. When this reputation began to waver, it encountered serious difficulties. Arguably, M&S has historically been an iconic retailer of 'British Quality Goods'. Its business model required suppliers to commit to long term contracts solely with M&S. This approach often led to over-reliance by manufacturers on the portion of trade they did with M&S. Accordingly, when the M&S fashion buyers changed suppliers on some aspects of the company's retail clothing offering, manufacturers were left dangerously exposed: many became insolvent. This has resulted in a change of climate, and no longer is a contract to supply M&S held up as the panacea it once was. In 1988 the company acquired...
References: 24.Management: The Marks & Spencer Way, Weidenfield & Nicolson, 1990.
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