MARKS & SPENCER will launch hundreds of new lines as it relies on its “special” image to fuel profit over the next three years, its new chief executive said yesterday.
Marc Bolland unveiled his blueprint for the retailer while also announcing a 17 per cent rise in half-year pre-tax profit to £348.8m. Bolland, who took over from Sir Stuart Rose earlier this year, said: “We are going to offer 1,000 new lines, making sure people can do a fuller shop. There will also be more clothing lines. We want to keep M&S innovative.” He said his focus would be on the UK market with international expansion put on the back burner. He rejected suggestions that the company was in advanced negotiations over a move into Spain – possible through a deal with the El Corte Ingles chain.
He said the retailer was targeting total revenue of £11.5bn to £12.5bn by 2013/14 – while also triggering an £850m investment plan to spruce up the business. Two thirds of the investment is to be used on the UK, he said.
“These changes will not be radical. We want to build on the good work already done. The (profit) figures are good, this is a business to build on.”
ANALYST VIEWS: IS BOLLAND’S PLAN LIKELY TO PROPEL PROFIT AT M&S?
KEITH BOWMAN | HARGREAVES LANSDOWN
In all, the new strategy does come with risks. The M&S brand has relied on an ageing customer base for some time, so trying to attract the young is a risk.
FREDDIE GEORGE | SEYMOUR PIERCE
Overall, we believe the market will like these plans, which are focused on strengthening the M&S brand. We expect consensus projections to be upgraded.
SAM HART | CHARLES STANLEY
Trading conditions are likely to be tough in 2011 and a slowdown in sales momentum is almost inevitable, but we think M&S can continue to make steady progress.