Marks and Spencer 2016 Annual Report Download - page 8

Download and view the complete annual report

Please find page 8 of the 2016 Marks and Spencer annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

06
MARKS AND SPENCER GROUP PLC
STRATEGIC REPORT
OVERVIEW
I am really proud and privileged to be your
new Chief Executive. The most important
thing I’ve learnt in my 25 years at M&S is that
we are at our best when we are completely
focused on our customers. My plan is to
keep things simple by putting our
customers at the heart of this business.
I’ve worked in every part of M&S, from the
shop fl oor to leading Retail and M&S.com,
from Menswear merchandising to running
our Food division and my most recent
position as Executive Director of Clothing
& Home. I care passionately about the
company and its success.
Before I talk about the future, let me
address our immediate past. Our
performance over the last year was mixed.
Whilst we continued our great performance
in Food, the performance of our Clothing
& Home business continued to be
unsatisfactory. Our International business
also had a challenging year and was
a ected by numerous issues, both internal
and external. Overall Group profi t was
impacted by a number of non-underlying
items, which this year include impairments
in our International business, our UK store
portfolio and a review of our Clothing &
Home buying and merchandising system.
There are further details on these in the
Financial Review on page 24.
I want M&S to play a leading role in the
future of UK and international retailing,
and I want it to have a clear and sustainable
path. When my appointment was
announced in January, I immediately
set about gaining a deeper understanding
of why parts of the business have been
underperforming. I asked myself and the
team a series of exam questions about M&S.
How can we understand our customers
better? Is our current structure right for
the company’s future? What are the growth
opportunities in Food? How do we recover
and grow our Clothing business? What do
we need to do to respond to the rapidly
changing consumer environment, both in
the UK and internationally?
Answering some of these questions and
tackling the issues will take time. But others
are more easily answered. We have set
out the fi rst phase of our plan: we
addressed how we can better understand
our customers and what M&S means to
them; we outlined our immediate plans to
address recovery and growth in Clothing
& Home; we talked about our Food growth
opportunity; and we launched a review of
our cost base. Details of these are below
and we’ll report back in the autumn on
the other key areas we are still reviewing.
If I was asked to sum up what M&S means
to me in one word, I’d say ‘special’. M&S is
a fantastic brand that has a history of
serving our nation with fantastic products.
That is why we believe in making every
moment special for our customers.
OUR CUSTOMERS
Our customers are now at the heart of
everything we do. This means that every
decision starts with them. Our actions are
driven by listening to what customers tell
us, not by what we think is right for them.
We know who our customers are and we
value every one of them. M&S serves 32.2
million shoppers a year, equivalent to over
half the UK population and two-thirds of
its adults. 20.1 million of those customers
buy our Food, which means we have an
opportunity with the over 12 million who
don’t. 58% of our customers are female,
and around half are over the age of 50.
Our most loyal customers account for
around 11% of spend. Looking at who our
customers are and how they shop with
M&S is crucial to our future. We need to
make more of M&S more relevant to our
customers more often. There remain great
opportunities for growth.
Read more on p08
CLOTHING & HOME
Our Clothing & Home division has many
strengths: we have leading market shares in
many categories, perceptions of our quality
are high, and customers like many of our
innovations. But as the UK clothing market
has grown and changed in recent years,
we have consistently underperformed.
Clothing & Home has been my focus
since I took over running the division in
September 2015 and turning around its
performance is my number one priority.
We took immediate action in some key
areas. We improved availability, sharpened
OUR BUSINESS
CHIEF EXECUTIVE’S
STRATEGIC UPDATE
We are at our best when we are completely focused
on our customers. My plan is to keep things
simple by putting them at the heart of M&S –
every decision starts with them.
STEVE ROWE CHIEF EXECUTIVE
INSPIRATION INNOVATION
Our values underpin everything we do...
We aim to excite and inspire our customers We are restless in our aim to improve things for the better