(Photo from : meetinleeds.co.uk)
As a business founded in our beloved Leeds, it is shocking to receive reports of Marks and Spencer’s profit loss of 88%. Michael Marks, a Polish migrant founded the dominant high street brand in 1884, setting up his ‘penny bazaar’ of pegs and buttons at the renowned Kirkgate market. The first official store opened here in Leeds in 1904, later to become one of the most iconic companies on our high streets. Marks and Spencer made a profit of £487 million in 2015 and still has a market value of £5.3 billion.
Yet despite this huge retail presence and obvious national success, why has there recently been extensive coverage of the stores decline?
According to The Independent Newspaper, Marks and Spencer is set to shut down 60 stores across 10 international markets. One of which is including the flagship store in Paris, displaying the severity and extent of this sudden decline. In the first four months of 2016, clothing sales fell almost 8.9% with an overall decrease of £568 million since 2012.
(Photo from : marketing week)
There are claims that the ghost of Brexit could be to blame for such losses. The feeling of uncertainty and lack of consumer confidence in the changing economic environment clearly will have an impact on consumer spending. PWC backs these assertions indicating a net decline of 87 fashion shops since the break from Europe and a shop closure trend of 15 a day in the first half of 2016. Therefore, shopper confidence is remaining incredibly ‘fragile’, clearly having a detrimental effect on major well-known stores like M&S.
Although, the picture is a very different one for new boss Steve Rowe who ensures the company is undergoing a shake-up rather than a shut down. When becoming the director of food in 2012 he had an overwhelmingly positive effect on sales, increasing that of the chocolate pudding for example by 3500%. Therefore, we would like to install trust and confidence in his confession that only 30 stores will be closed, either being relocated or changed to the more successful food halls or ‘simply food’ convenience stores. In his 5-year plan, he sets to increase website sales, moving from catwalk copy clothing to favouring classic designs and higher quality fabric. So, with the recent closure of the front runner department store BHS, all we can do now is sit back and wait to see whether the layout of our classic British high street is set to change even further with M&S following in its footsteps.
By Zoe Allison