Christmas Season Critical For Marks & Spencer

Viewers and shoppers in the UK and Ireland apparently are eagerly awaiting the launch of annual Christmas advertising by retail giants John Lewis and Marks & Spencer even though Christmas campaigns have already been launched by a few retailers, including Asda, Lidl and Aldi.

The two largest retailers have not disclosed details of their possible campaigns with John Lewis not even disclosing the beginning date of its Christmas campaign.

It is likely that Marks & Spencer will win over John Lewis in as far as the launch of Christmas campaign is concerned with the company likely to launch its campaign this week. Despite the campaign contents and theme being kept a secret by M&S, there is already much talk about the possible theme on social media.

It has been reported that £5 million has been paid to Elton John to star in the John Lewis ad. And Facebook and Twitter was abuzz earlier this week of a brief video clip of a rocket man bauble hanging on a Christmas tree.

And the Christmas campaign has assumed more importance for M&S as it has become more important for the retailing giant to attract more revenues following its not so encouraging third quarter results where the retailer reported drop in sale of 2.7% in clothing and homewares sales. This reflected the strategy of store closures adopted by the company as a part of its plan to close 100 branches by 2022.

The retailer is still “letting customers down” as popular new clothing lines sell out too quickly. Admitted M&S boss Steve Rowe.

“We are letting customers down with availability,” said M&S chief executive Steve Rowe. “We have some good products this season and the ranges are improving, but we are still in a position where we are buying too many [clothing] lines. The range is too broad and too shallow.”

The company was leaving no stone unturned, promised Rowe. This is the latest effort to revive the struggling high street giant. The issues faced by the retailer had been earlier identified by him which included “an ageing customer base, a very wide range, a weak supply chain and an ageing store portfolio”.

The retailer reported a 71% increase in its pre-tax profits to £126.7m in the first half. The period has not been a good one for the retailers in general because of a summer heatwave which kept shoppers away from the high street even as companies find it financially unviable to op-en and operate large store estates because of rising costs.

“Against the background of profound structural change in our industry, we are leaving no stone unturned and reshaping our business, its organisation and culture,” he said.

Further closure of stores of M$S was not ruled out by Rowe because, he said, the retailer had to “learn the lessons of the past” and efficiently manage the store portfolio properly in the scenario rivals such as Primark expanding in the UK

“The combination of rising business rates and rent increases continues to put pressure on the cost base but we expect rent inflation to diminish substantially as the new reality dawns on landlords and centre owners,” said Rowe who said rent and rates costs has increased by 1% during the period.

(Adapted from IrishTimes.com & FinancialTimes.com)

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