Marks and Spencer 2008 Annual Report Download - page 10

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8MARKS AND SPENCER GROUP PLC
In order to achieve the scale of our property plan, in November
2007 we announced that we would open an additional 15%
to 20% more space in the next three to four years.
But, like any business in this market, we need to prioritise costs.
Although we will continue to invest in our store modernisation
and expansion programme, this year we will particularly focus on
new footage, and modernisations with extensions. See page 9.
3. Developing our M&S Direct business
M&S Direct covers our e-commerce website; home catalogue;
Christmas hamper delivery; flower and wine delivery; in-store
ordering service; and Lunch to Go. During the year it not only
became an important part of our commitment to become a
multi-channel retailer, but with sales up £60m to £220m, it
put us on course to reach our target of £500m annual sales
by 2010/11.
On our e-commerce site in particular (relaunched with Amazon
in March 2007), we have recorded strong growth with visits
to the website up by nearly 60%, and sales growing ahead
of the market.
4. Building an International business
Expanding internationally provides strong opportunities to build
a broader revenue base and drive profitable growth in some of
the world’s most exciting markets. In November 2007 we set
ourselves a target for International to achieve between 15%
to 20% of total Group revenues within the next five years
(in 2007/08 it contributed 7.9%). We will do this by flexing our
business model so that we expand not just through franchise
partners, but also on a part-owned and wholly-owned basis.
We have already signed deals in Europe with two of our existing
partners, and in India where we will open around 30 to 50 new
stores in the next five years. This is in addition to our plans to
enter China on a wholly-owned basis later this year.
In 2007/08 we made significant strides against the plan,
opening 38 new stores, which helped lift sales by 16.8%
to £712.9m; and operating profit by 33% to £116.4m.
5. Keeping up momentum on Plan A
Plan A, our five-year ‘eco plan’, reached the end of its first
year in January 2008. We pledged to meet 100 separate
Plan A commitments within five years, and so far we’ve
made progress on 94.
Despite the tough consumer climate, our commitment to
Plan A remains, because there are compelling moral as
well as commercial reasons to do so. Plan A gives us brand
differentiation, and as Al Gore said, “a sustainable business
can be a profitable one”.
Looking ahead
The next year will be tough. We will have to continue to
challenge ourselves to become more efficient, drive down
costs and improve our rate of return. At the same time we
must maintain our investment for the long term both in the
UK and overseas. I believe that we have started to achieve
this. We have talented and motivated people; well-priced,
quality products; a clear plan; and dedication to understanding
what our customers want – all of which put us in a good
position to meet the difficult market conditions that lie ahead.
I would like to pay tribute to all of our staff and suppliers for
their hard work this year. It has been a tough but rewarding
experience, and they can take pride in their achievement.
I would also like to thank Lord Burns for his support as
Chairman over the past two years. He has guided the Board
through some difficult discussions, always having the best
interests of the Company at heart.
Sir Stuart Rose
Chief Executive
1 Clem Constantine
Director of Property
and Store
Development
2 Steve Rowe
Director of Retail
3 Nayna McIntosh
Director of Store
Marketing and Design
4 Carl Leaver
Director of
International Business
5 Kate Bostock
Executive Director
of Clothing
6 Ian Dyson
Group Finance and
Operations Director
7 Sir Stuart Rose
Chief Executive
8 Steven Sharp
Executive Director
of Marketing
9 Steven Esom
Executive Director
of Food
10 Tanith Dodge
Director of Human
Resources
11 Andrew Skinner
Director of
GM Merchandising
and Planning
12 Darrell Stein
Director of
IT and Logistics
13 John Dixon
Director of Home
and M&S Direct
1
23
4
5
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