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John Moylan reports for BBC News
"Prices on British high streets continue to fall"
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Tuesday, 23 January, 2001, 09:08 GMT
M&S: A brand new challenge
Marks & Spencer store
M&S needs to innovate and excite consumers again
Building up a brand which is known, trusted and admired is one of the hardest tasks for a modern business.

It is a process which can take decades to get right.

It takes a much shorter time - in the case of Ratners one joke - to rid that brand of all its value.

No-one wants to be associated with a failing brand

Prof Gary Davies

Marks & Spencer is the grandad of British consumer brands, spending most of the 20th century building up a reputation as the UK's most admired business.

Customers, investors, loyal staff and envious rivals all had to acknowledge that M&S was Queen of the British High Street.

It is just three years since the opening of each of its new shops abroad was greeted with a sort of Imperialist swell of pride in the average Brit's chest.

Sudden decline

St Michael was leading the fightback from years of national decline, with all those foreign shoppers falling in love with high quality British-made goods.

Three years ago M&S was valued at nearly 20bn and was making profits of 1bn a year.

Then suddenly it all started to go wrong...

There are many reason given for its decline, such as poor ranges of clothes, declining quality and the board's refusal to allow customers to use credit cards.

Its fall from grace also coincided with the period in which production of many M&S clothes has been switched abroad.

One thing for certain is that its decline is a subject which has preoccupied much of the media for the past three years.

Tesco's helping hand

The question increasingly being asked is whether M&S can ever regain its place in the hearts and minds of the British public.

Ironically, one of those it may want to learn a lesson or two from is the supermarket chain Tesco.

In the early 1980s Tesco was a relatively down-at-heel chain, far behind the dominant player in the market, J Sainsbury, whose food was known for its quality and reasonable cost.

Its reputation was so bad that current Tesco chief executive Terry Leahy recalls there being months of discussions about relaunching the chain under a different name.

Eventually, the decision was taken to retain the name and the new, more upmarket Tesco has gone from strength to strength.

The recipe was essentially to give customers what they wanted at the right price and to make the shopping trip more enjoyable than any of their rivals.

Far East sparked decline

Clothing retailer Next has also had image problems. Little more than two years ago it was seen as an outdated brand.

Its recovery since then has been dramatic. Again its recipe: giving customers what they want at the price they want it.

Professor of Retailing at Manchester Business School, Gary Davies, put M&S's initial problems down to having a poorer year in the Far East after a bumper year, so leading to lower profits and sparking a string of negative press articles.

The critical articles had an immediate knock-on effect: "No-one wants to be associated with a failing brand," said Prof Davies.

Meanwhile the switch to sourcing clothes from overseas meant it was no longer able to place late orders with manufacturers for particularly popular items or colours of items.

Need to innovate

The lengthening of the time between ordering and receiving the stock led to over-stocking of some lines and shortage of some popular items as M&S learned to deal with the new supply chain, he said.

M&S hired consultants to look at all aspects of branding, including everything from shopfronts to bags and till receipts.

The results have come in new look, more stylish bags and the roll-out of a new brighter look to shopfronts.

There have also been the first ever television and newspaper adverts plus new stand-alone sections with more upmarket designer clothe ranges.

Prof Davies says the challenge has been for M&S to get on the front foot again.

"M&S is part of our culture, it is something that millions of us experience each week," said Prof Davies.

It needs to begin setting the pace again, as it used to with its clothes, with its food, where it virtually created the UK ready meal market and with its financial services, an idea which it beat most of is rivals to.

"Marks & Spencer needs to do something to stimulate our interest, particularly of young people, to innovate, to be exciting," said Prof Davies.

The attempts so far have yet to succeed, although the surge in homeware sales suggests that there are areas in Marks continues to sparkle.

But however many good ideas there are, chairman and chief exectuive Luc Vandevelde believes the underlying revival will be achieved when the clothing ranges are of a style, and at a price, which persuade shoppers to buy.

It sounds like a simple formula, but so far it has proved an elusive one.

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See also:

21 Dec 99 | Business
Fresh M&S shake-up
12 Dec 99 | Business
Tesco 'follows up M&S interest'
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