Marks and Spencer 2009 Annual Report Download - page 6

2Marks and Spencer Group plc Annual report and financial statements 2009 Directors’ report
The year at a glance
During the year we acted decisively to meet the challenges of the global
economic downturn, taking steps to manage costs tightly and respond
quickly to the changing needs of our customers.
Our adjusted profits are down 40.0% on last year to £604.4m.
This is due in part to conditions on the High Street as well as our
conscious decision to improve our value, without compromising our
quality. We have built unrivalled trust in the M&S brand over the last
125 years, and will not sacrifice our core principles when times get tough.
Clothing is our customers’ biggest discretionary purchase and as the
UK’s leading clothing retailer, with the largest market share, it was
inevitable that demand would ease off as customers reined in their
spending. Although value market share is marginally down from 11.0 to
10.7%, we have held our volume market share at 11.2%. We believe this
is evidence that Kate Bostock and her team are in tune with our customer
base (see page 26).
You will see from John Dixon’s review of our Food business (on page
32) that we are now back on track after a challenging period at the start
of the financial year. John became Director of Food in July 2008 and
immediately started to address our prices, innovation levels and
availability. With a clear mandate for growth, John and his team are
returning to our brand values of Quality, Value, Service, Innovation and
Trust. Early signs show that this is working, with the rate of decline in our
UK like-for-like sales improving quarter to quarter.
Our Home, International and M&S Direct businesses continue to
be growth areas in a challenging year, with International and M&S Direct
forming key platforms for our future growth plans. M&S Direct had a
good year, with sales up 19.0%, reflecting new initiatives including an
online wine club and international delivery. Our International business
reported growth of 25.9% following the ongoing integration of our
subsidiary partners.
Chairman’s overview
continued
1958 We sold our first Christmas pudding in
1958 and now sell around 1.6 million each
year as well as 4 million Christmas cakes.
125 YEARS OF QUALITY
1929 We first started selling
sandwiches from the ice cream
counters in our stores in 1929.
Today the nation’s favourite is prawn
mayonnaise. Sandwiches that is,
not ice cream.
125 YEARS OF SERVICE
Above: Florence Chittick has spent her entire
working life at our flagship Marble Arch store in
London. In 47 years she’s seen recessions,
watched our customers grow up from children
into adults and in the 1970s worked alongside
our Chairman, Sir Stuart Rose.
“When I joined M&S, then Chairman Marcus
Sieff told me I was now part of the family.
He was absolutely right and every day I’m
reminded of that when I come into work.
Having started at a time when we didn’t have
fitting rooms, when the food hall was just a
small room at the back of the building, and
when all of our sales were done over the
counter, I’ve seen Marks grow and grow.
I’ve worked every department in the store,
so there are always a lot of familiar faces
as our loyal customers keep coming back.
Every day still brings new challenges, so I’ll
be here for quite some time yet.”
Florence Chittick, Womenswear Section
Manager, Marble Arch