The Chairman of marks and Spencer gave him a stern warning about the deadly threat facing the street the giant, as he refused to rule out further store closures and job losses.
“This business is on a burning platform,” said Archie Norman, who took over as Chairman of M&s last year. “We have no God-given right to exist and if we don’t change and develop the company the way we want to in the next few decades will not be M&S.”
The language of Norman reiterated that Nokia CEO Stephen Elop in 2011, when the mobile phone firm faces annihilation of smartphones. He said that the retailer in the first stage of the five-year turnover, which involves first getting the company to confirm the serial management deficiencies that have developed in the years of falling clothing sales and profits.
In may, M&s reported a 62% drop in annual profit to $ 66.8 m after a bill of £514.1 m on restructuring, which included £321m to pay for the first phase of the program to close 100 stores. Norman spoke at the annual meeting of shareholders, which unlike its main competitor, next, M&S was not so ruthless closing of old stores, shopping habits have changed. A shareholder asked for confirmation that there would be no further job losses, but did not receive it.
“We have old stock in places where people don’t spend and this will drag on our performance,” said Norman. “We grasp the nettle that should have been grasped many years ago. We have already said that it will be 100 stores, but I can’t tell you that it’s all over. We need to get to the point where we have a modern property and we have to go through the pain barrier to get there.”
M&s tailor is the official football team of England and supplier of the now legendary vest of Gareth Southgate. Photo: Ozan Kose/AFP/Getty images
Comments Norman came as Poundworld, the discount retailer that went last month to the administration, said the 25 stores will be closed for the weekend, with the loss of almost 250 jobs. Come to closure after administrators at Deloitte failed to find a buyer for the whole business, which employs more than 5,000 people in 335 stores across the UK.
Poundworld is one of a string of retail chains and restaurant chains that are collapsed or narrowed on the back of high costs and reduced consumer spending, which also makes life difficult for M&S.
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Steve Rowe, chief Executive of m&s two years, said: “It was not a good year. We exceeded expectations in the city, but not to do it that way, I can be happy with or proud”.
Rowe was particularly critical of the web activity. Pages on the site still gets 50% more load than its smooth rivals despite £150 m reconstruction, and its purpose-built warehouse in castle Donington, Leicestershire could not maintain its stated ambition to have 30% of its clothes online sale in five years. “We are not digital in the era when the majority of retail starts with the mobile phone,” said Rowe.
A rare bright spot amid the gloom has been the success of many years the role of M&s as the official tailor to the England football and a provider of the now legendary vest of Gareth Southgate, who became a sensation in social networks.
“We are proud to support the England boys as they progress through the world Cup,” said Rowe. “I finish here because of the relevance of the transformation of the England football and hard work that went into changing something we are not appreciated … we are determined to continue to transform Your business and make M&s Special again.”