"Our range remained too wide in FY 2018-19 with the volume of options in our range splintering our buying scale and making our shops challenging to navigate. Our size ratios have been historically misaligned with the profile of the contemporary family age customer we aim to appeal to. However, where we have made progress in pruning options and introducing slimmer fits and more mid sizes, the customer response has been very strong. For instance, our new denim launch produced an initial 20 per cent sales uplift and our sales of £15 women’s jeggings were up 30 per cent over the campaign period," M&S said in its press release.
International revenue decreased by 13.4 per cent at constant currency driven by the closure of stores in loss making exit markets, and the sale of business in Hong Kong to a franchise partner in December 2017. Excluding Hong Kong and exit markets, revenue grew by 1.1 per cent.
The international business was already fully embarked on rationalisation and repositioning prior to the transformation programme and further good progress has been made. During the year, M&S implemented the ‘market right pricing’ programme across markets in Clothing & Home. The programme’s cumulative performance since implementation has been encouraging with sales up 8 per cent and volumes up 20 per cent, following a net 10 per cent reduction in selling prices. This performance is helping to build confidence with our partners to reinvest into the business. In the year we opened 37 stores and modernised a further 56.
“We are deep into the first phase of our transformation programme and continue to make good progress restoring the basics and fixing many of the legacy issues we face. As I have said, at this stage we are judging ourselves as much by the pace of change as by the trading outcomes and change will accelerate in the year ahead," Steve Rowe, Marks & Spencer CEO said.
In Clothing & Home, M&S expects net store closures to reduce sales by around 3 per cent. It anticipates gross margin to be between -25bps to +25bps, with further investment in trusted value. The UK operating costs is likely to decrease by up to 1 per cent, largely as a result of continued cost efficiencies, store closures and lower depreciation.
“Whilst there are green shoots, we have not been consistent in our delivery in a number of areas of the business. M&S is changing faster than at any time in my career - substantial changes across the business to our processes, ranges and operations and this has constrained this year’s performance, particularly in Clothing & Home. However, we remain on track with our transformation and are now well on the road to making M&S special again," concluded Rowe. (RR)
Fibre2Fashion News Desk – India
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