Marks and Spencer 1998 Annual Report Download - page 28

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The Americas
ANOTHER YEAR OF SIGNIFICANT IMPROVEMENT SAW BROOKS BROTHERS
STEER CONFIDENTLY TOWARDS GROWTH AND IMPROVED PROFITABILITY.
– the
largest of our three operations in North
America – sustained profitable growth in a
challenging market. Kings Super Markets
delivered another good result. In Canada,
a newly-appointed chief executive officer is
implementing a strategy to take the
business forward.
NEW STRUCTURE AND FRESH INITIATIVES
DRIVING GROWTH
Brooks Brothers continues to gain share in
the US men’s clothing market and is
consistently among the best performing
retailers in like-for-like sales. This
improvement reflects successful
restructuring of the business to achieve
greater focus within separate streams of
operation. O penings and closures during
the year saw the total number of stores in
the US rise by seven to 119. O utlet stores
continue to perform strongly, while the
mail order business has been improved by
investment in a new warehouse
management system improving order
fulfilment.
New initiatives are attracting a wider
range of customers. We are introducing
brighter, more contemporary store layouts,
modernising the brand image while
retaining its essential qualities of tradition
and service. Price-tiered displays target
customers more accurately and encourage
them to upgrade their purchases.
Womenswear ranges are developing well,
particularly careerwear. We are planning
dedicated womenswear stores next year.
BROOKS BROTHERS IN ASIA
The opening of nine new stores contributed
to a satisfactory result from Brooks
Brothers (Japan). With 19 years of trading
experience and brand exposure behind us,
we expect a swift return to previous levels
of business once trading conditions
improve. Two franchise stores opened in
Hong Kong. We expect the Far East to
become a strong market for Brooks
Brothers, because of the region’s
receptiveness to US culture and the brand’s
aspirational status.
KINGS SUPER MARKETS
This high quality supermarket operation –
which shares Marks & Spencer’s
commitment to freshness, service and value
– delivered another year of sales progress
although profits were affected by pre-
opening and other non-trading costs. Two
new stores during the year increased
penetration of the valuable N ew Jersey
market. The new store at Florham Park is
pioneering new concepts such as a food
demonstration area which offers a high
standard of hot and cold take-away meals.
CANADA
Marks & Spencer Canada recorded a
slight improvement in sales though the
market remains difficult and profitability
was affected by reorganisational costs. We
have appointed David Stewart, a highly
experienced Canadian retailer, as CEO .
He is implementing strategies to improve
performance.
TURNOVER £606.2m
OPERATING PROFIT £16.8m
MA RKS & SPENCER CANA DA 43
NUMBER OF BROOKS BROS STORES/ FRA NCHISES 191
NUMBER OF KINGS SUPER MARKETS 22
OTHER FRA NCHISES 5
Brooks Brothers US
26 OPERATIONAL REVIEW