Marks and Spencer 2015 Annual Report Download - page 11

OUR BUSINESS
OUR PERFORMANCE
GOVERNANCE
FINANCIAL STATEMENTS
09
ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
our customers a much more engaging
online experience. M&S.com is a superior
shop window for our products and our
customers appreciate its strong editorial
point of view: 8.2m people visited its Style
& Living editorial section over the year.
Together, this has resulted in a steady
improvement in sales and we fi nished the
year with growth of 13.8% in Q4. Over 7m
people have registered to use the site,
surpassing registrations on our old site.
We continue to improve our stores to
make them more inspiring places to shop.
We invested in the quality of the store
environment, with refreshed Womenswear
departments and new look Menswear
departments. We also improved
Shop Your Way with extended delivery
cut-o times, o ering a more convenient
and joined-up customer experience.
INTERNATIONAL
Our International business faced multiple
macroeconomic challenges this year.
These issues a ected franchise partners,
particularly in Russia, Ukraine and Turkey –
our Middle East region – and resulted in
reduced wholesale shipments, which led to
lower profi ts. However, we were pleased by
our performance in other priority markets,
particularly India, and by the good growth
in our Food business in Europe and
Hong Kong.
BRAND
The new core values are aligned with our
business and will drive the behaviours
needed to achieve our customer promise
of ‘enhancing lives, every day’. Our brand
was enhanced by imaginative marketing.
We launched Only M&S, a unifi ed campaign
for Food and clothing – we are one
brand with many stories to tell. In Food,
‘Adventures in…’ celebrated the creativity,
craftsmanship and passion behind our
food and was very well received by our
customers. The clothing campaign marked
a step change in approach and with
renewed confi dence we showcased our
edit of the latest trend. ‘The Two Fairies’
Christmas campaign combined bold ideas
with imaginative use of social media to
position M&S as a relevant, lively brand.
PEOPLE
For M&S to thrive in the future, we have
tobea modern, forward-looking and agile
company today. Over the year, we continued
to roll out the necessary systems and
processes to ensure that – from top to
bottom – we are in the right shape to meet
future challenges. Our Fit for the Future
programme saw us refi ne the way we do
things. We streamlined our processes,
clarifi ed lines of command and introduced
initiatives toencourage entrepreneurialism.
Wealsorealigned our executive team’s
responsibilities. The changes ensure greater
accountability and our new simplifi ed team
structures allow us to move with more
speed and agility.
PLAN A A
Over the last 131 years, M&S has built a
unique position and a signifi cant part of
that is down to customer trust. Maintaining
this position of integrity is central to the
Company’s future. Our customers trust us
to always do the right thing, which is why
Plan A 2020 is absolutely crucial. Plan A
has taught us that we can achieve more
when we collaborate inside and outside of
the business. We celebrated a decade of
Marks & Start, our scheme which provides
training and work experience within M&S
and our supply chain for the long-term
unemployed. Make Your Mark, our
programme that focuses on supporting
young people facing barriers to
employment, is part of Movement to Work,
a larger programme we helped to found
in 2013. Almost 200 of the UK’s biggest
companies are now signed up. Engaging
with our communities underpins Plan A
and this year our employees and customers
raised a total of £7.5m for our local and
national charity partners. We have a clear
plan to further engage our customers and
communities in Plan A. In 2010, we set out
our goal to be the world’s most sustainable
retailer and this continues to drive our
ambition to improve things for the better.
MARC BOLLAND CHIEF EXECUTIVE
As we continue the work to transform
our infrastructure, we will now focus on
consolidating our position as a leading
international, multi-channel retailer.
Using our strengthened capabilities, our
priorities, both in the UK and International,
will be to accelerate our Food growth, deliver
an end-to-end GM operating model and to
drive the experience on M&S.com. We will
continue to develop a world class talent
pool, further growing our skills in key
strategic areas.
The UK food market will remain
challenging but we are well positioned
with a store format that caters for how
shopping habits are changing. We opened
62 Simply Food stores this year, and we
have a strong pipeline with the fastest
Food store opening programme planned
in M&S’s history.
Whilst we expect the Clothing and Home
market to remain highly competitive, we will
deliver growth through a focus on stylish
design, quality and newness, with better
availability and more choice.
We anticipate that our International
business will continue to be impacted
by this year’s weakening euro and
macroeconomic factors will remain a
challenge, particularly in our Middle
East region. However, we will focus on
delivering relevant ranges to our local
customers, improving our like-for-like
sales performance across our owned
and franchised market and building
our international supply chain.
INTEGRITY IN TOUCH
LOOKING AHEAD
We always strive to do the right thing We listen actively and act thoughtfully
Our strategic priorities for 2015/16 remain unchanged
FOOD SALES GROWTH GM GROSS MARGIN IMPROVEMENT IMPROVE GM PERFORMANCE STRONG CASH GENERATION