Marks & Spencer Finals

[Arborbridge]

I hold MKS. I am exactly their taget market. I buy school uniform there (it's still excellent), sometimes food, and sometimes polo shirts for my husband, which he likes. Womenswear is atrocious and as much as I want to support them I have just about given up on it. They scatter items around the store almost randomly so I can't go and buy pair of black trousers without covering almost every inch of the store to find all the options. They stick frills and bows and embellishments on things. I'm nearly 50, I don't want that sort of rubbish on my clothes. I want good quality basics that will last, not throwaway fashion. I also want items that are sized consistently. I have bought an item in one colour that fits perfectly, gone back and bought the same item in the same size, just a different colour, and it didn't fit at all. They seem to have been going after younger people's fashion, but young people will never shop there, so all they are doing is alienating their core market. I almost never buy anything from them now, which is a shame. They need to concentrate on good quality basics in a core range of colours, but don't seem to recognise that. People like me have been telling them this for years, but instead they keep chasing 'fashion' that we don't care about.

I am holding for now, but unless they change their buyers I can't see their situation improving.

Thanks for that post. You are one of the few people to have made some seriously useful and specific points on the subject: you should be on that program tonight!

[Trillis100]

Thank you. I rarely post on here as I still consider myself an investing newbie (although I have dabbled for years), but shopping (or not) at MKS is something I can comment on with expertise

[Dod101]

Trillis sounds exactly like my late wife. She used to say all of that and as Trillis says it does not seem to be getting through to M & S. Not much hope for them then. I guess at one time they almost dictated or at least set the fashion for women of a certain age but no now.

Who would hold them as an investment if the management is as dumb as that?

Dod

[ReformedCharacter]

Trillis sounds exactly like my late wife. She used to say all of that and as Trillis says it does not seem to be getting through to M & S. Not much hope for them then. I guess at one time they almost dictated or at least set the fashion for women of a certain age but no now.

Who would hold them as an investment if the management is as dumb as that?

Dod

I don't know if the management is dumb, possibly they are doing the best they can in a marketplace that has changed completely, but I'm sure that I've heard similar comments about MKS for at least 20 years. I seem to remember Jeremy Paxman complaining a few years back that M&S underpants no longer seemed to hold his, um, 'components' in place the way they used to.

RC

[PinkDalek]

For Dod101 and others:

It is imperative that we simplify our culture - as this is the only way to drive change right through our business. We need to change our organisation, move on from the structure of a single business led by functional directors. This created a top-heavy business that was inward looking and too "corporate".

https://www.investegate.co.uk/marks---3 ... 00119554O/

[Bouleversee]

R.C.

Sorry, but it's the products which have changed not the customers' tastes nor their pockets in this particular customer base and more of those are living longer. They did not have to cater for those who were already well provided for elsewhere and neglect their core custumers. The results speak for themselves. Like Dod, I call that dumb.

[PinkDalek]

Unsure to whom you were replying (now spotted your "R.C." - maybe an edit) but I provided the extract in view of the importance Dod attaches to culture.


Incidentally, Paul Scott is positive (not that he's a HYPpy):

https://www.stockopedia.com/content/sma ... ad-366749/

[ReformedCharacter]

R.C.

Sorry, but it's the products which have changed not the customers' tastes nor their pockets in this particular customer base and more of those are living longer. They did not have to cater for those who were already well provided for elsewhere and neglect their core custumers. The results speak for themselves. Like Dod, I call that dumb.

Yes, the products have changed and yes there is still demand from customers for similar high quality items. I quite agree and didn't intend to imply otherwise. That is why I used the word 'marketplace' not 'customers'. I remember my Aunt discussing her 'Marks and Sparks' shares over 50 years ago, she was a very typical customer. But the clothes retailing business (marketplace) has changed hugely and catering for the younger generation and the lower end of the market is where the money is made and has become a proportionally much larger part of the marketplace, as far as I know. MKS management, I presume, decided that their 'core market' was in decline, ie dying off, and decided to target the better end of 'down market' and younger shoppers. It was not and is not the case that demand has ceased for the traditional MKS virtues as you and I can both attest. Whether the business would have been more profitable or declined quicker without this change of strategy is the question and I'm not intending to defend MKS strategy but it could be that the writing was on the wall for businesses like MKS anyway and sometimes not changing with the times is 'dumb' too.

RC

[tjh290633]

Yes, the products have changed and yes there is still demand from customers for similar high quality items. I quite agree and didn't intend to imply otherwise. That is why I used the word 'marketplace' not 'customers'. I remember my Aunt discussing her 'Marks and Sparks' shares over 50 years ago, she was a very typical customer. But the clothes retailing business (marketplace) has changed hugely and catering for the younger generation and the lower end of the market is where the money is made and has become a proportionally much larger part of the marketplace, as far as I know. MKS management, I presume, decided that their 'core market' was in decline, ie dying off, and decided to target the better end of 'down market' and younger shoppers. It was not and is not the case that demand has ceased for the traditional MKS virtues as you and I can both attest. Whether the business would have been more profitable or declined quicker without this change of strategy is the question and I'm not intending to defend MKS strategy but it could be that the writing was on the wall for businesses like MKS anyway and sometimes not changing with the times is 'dumb' too.

RC

Oddly enough, I inherited 72 MKS shares at 272p from my mother in 1970, 48 years ago, and at the time they had had frequent scrip issues, so that by 1984 the 75 had risen to about 900. The dividend per share was 5.46p on the 75 shares and by 1990 it was 6.40p on the 900 shares. by 1990 the SP was 203p. Dividend reduced in 2000 to 9p (from 14.4p), capital returned via B-shares in 2002, another reduction in dividend in 2009 to 15p (from 22.5p in 2007) and it has been steady at 17.7p for a few years.

A single share would have had an IRR of 11.5% since 1970. Rather less if held in recent years.

In my view, what they ought to do is to produce a standard range of clothes that never change, as well as their more fashion-driven items. Underclothes, basic garments like blouses, shirts, trousers and skirts, jackets and outer wear. They keep chopping and changing, for no apparent reason. The underpants are a typical case, where the design changed. Fortunately I haven't had to buy any recently, as my J C Penny items have given sterling service. The M&S replacements have been variable in style and size. I used to stock up in J C Penny on my visits to the USA when working, as the quality (made in Honduras) was very good, and the price competitive. Factory outlet stores provided Van Heusen shirts, cheaper than I could get at MKS. My Korean raincoat (London Fog debranded) looks like seeing me out.

They just need to be competitive and provide consistently good quality.

TJH

[Julian]

... I want good quality basics that will last, not throwaway fashion. I also want items that are sized consistently. ... They need to concentrate on good quality basics in a core range of colours, but don't seem to recognise that. People like me have been telling them this for years, but instead they keep chasing 'fashion' that we don't care about.

Interestingly, and supporting your point I think, there is an international high street retail chain out there doing just what you suggest and doing very well from it.

I live in the London area and, despite having a reasonable sized M&S less than 5 minutes walk from my house and being a shareholder, I do almost all of my clothes shopping at Uniqlo about 5 miles away. While admittedly having some come-and-go type fashion lines, most of Uniqlo’s stuff is basic simple shirts in cotton, linen, flannel etc, various simple knitwear styles, trousers, outerwear, underwear etc, and all in multiple colours and stores that seem to stock almost all of the ranges in sizes XS, S up to big sizes as opposed to M&S’s where most stores don’t seem to stock small sizes and even when they do they often are still too big. Uniqlo’s core stuff also stays in its range year after year after year without radical changes in style, sizing or colours; it’s pretty much the clothing equivalent of Ikea Billy bookcases and the various other Ikea favourites!

The thing Uniqlo doesn’t have going for it that M&S does is national retail presence, in the U.K. Uniqlo is very much southern England I think (but might be wrong). If M&S had Uniqlo’s core men’s clothing ranges (I have no idea what the women’s ranges are like) I would be buying most of my stuff there. It’s just the sort of clothing operation that, at least from my perspective of a non-fashion-chasing 58 year old male shopper, M&S should be aspiring to.

- Julian

[Dod101]

For Dod101 and others:

It is imperative that we simplify our culture - as this is the only way to drive change right through our business. We need to change our organisation, move on from the structure of a single business led by functional directors. This created a top-heavy business that was inward looking and too "corporate".

https://www.investegate.co.uk/marks---3 ... 00119554O/

Thanks PD. I have read of that elsewhere, the aspiration to change the culture that is, but the trouble is as I said much earlier in this thread I think, it is very difficult to change the culture for good or ill in any organisation. You need to take a sledge hammer to it which is why they should not be tinkering around the edges with talk of closing 100 stores they should be closing 250 or more and getting rid of most of the top management. M & S has such a prominent place in our national psyche that it will need a real shock to make any real change.

Currently they simply do not know what they are. Uninvestible I'd say.

Dod