(changes reference in fifth graph to profits from profit
margins after clarification from the company)
By James Davey
LONDON May 1 Marks & Spencer, Britain's
biggest clothing retailer, launched a new online push on
Thursday, targeting the 19 million customers a year who shop in
its UK stores but do not use its website.
The 130-year-old firm, which also sells homeware and
upmarket food, is at the end of a three-year, 2.3 billion pound
($3.9 billion) plan aimed at addressing decades of
under-investment and reversing falling sales and profit.
Marc Bolland, chief executive since 2010, is aiming to turn
M&S into an international retailer that reaches customers
through stores, the web and mobile devices and is better able to
compete with faster-growing rivals like Next.
A big chunk of the investment was spent on establishing a
huge new e-commerce distribution centre (EDC) in Castle
Donington, central England, that opened last year and on a new
website platform that went live in February.
E-commerce chief Laura Wade-Gery said the EDC and new
website gave the company confidence it can achieve profits at
M&S.com that match those from stores within three years.
"Our e-commerce business is profitable and we're planning to
make it more profitable," she said at a media and analyst
presentation to mark the start of a marketing drive to back the
M&S says it has 34 million customers a year. Of that total,
6.7 million shop with M&S in store and online, 8.3 million shop
with M&S in store but do not shop online with the firm or with
competitors, while 19 million shop with M&S in store but do shop
with competitors online.
"We do believe that the 19 million consumers that do not
consume at M&S.com today is a real opportunity for us," said
marketing director Patrick Bousquet-Chavanne.
Last month M&S posted its best quarterly performance in
clothing for three years, indicating its turnaround plan may
finally be gaining traction after several false dawns. However,
the firm still posted an eleventh straight quarterly fall in
underlying general merchandise sales.
M&S's online sales increased 12.5 percent in its fiscal
fourth quarter to March 29.
The slowdown from third-quarter growth of 22.7 percent was
attributed to the February shift of the M&S website from a
platform provided by Amazon to its own new platform.
The firm said it managed the transition cautiously, reducing
its usual level of marketing activity to ensure a smooth move.
"We're beginning the first steps in accelerating the
marketing and we will steadily build sales over the coming
months," added Wade-Gery.
When M&S reports 2013-14 results on May 20 it is expected to
report a third straight fall in annual profit.
Analysts are forecasting a profit before tax and one-off
items of about 615-630 million pounds - that would be 6 percent
less than M&S made in 2012-13 and for the first time less than
Next's annual profit.
($1 = 0.5922 British pounds)
(Editing by Pravin Char)