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Article 1: Private equity could drive UK company listings

revival

Wed, Mar 20 2013 (extract)

A trickle of British company stock market listings in London could gain momentum if a more receptivemood among investors persuades private equity firms the time is right to sell.

New listing activity in London has been dominated by international companies over the last few years.Since 2008, British-domiciled firms have accounted for just over a third of the London main market debutsraising more than 100 million pounds, according to Thomson Reuters data. But so far this year the balancehas shifted in favour of British firms.

British estate agent Countrywide priced its London share sale at the top of its range on Tuesday.

This followed house-builder Crest Nicholson which completed a London share sale in February.

As well as Countrywide and Crest, three other British firms are planning to complete London listings thismonth. In total, the five are seeking as much as 1.4 billion pounds, almost four times as much as was raised

in London by the same point in 2012.Although international companies are expected to retain their dominance over the coming months, a backlog of private-equity-owned businesses which the buyout firms are waiting to sell could help to boostthe proportion of home-grown listings.

"There are a lot of good domestic businesses owned by private equity for whom the obvious exit really inmany situations ought to be the public markets," David Vaughan, UK and Ireland Head of Initial PublicOfferings at Ernst and Young, told Reuters. "The dam which is still not bursting is private equity owners being willing to bring companies to IPO (initial public offering) here in the UK."

Countrywide, due to make its market debut on Wednesday, is backed by private equity groupsOaktree Capital ,Apollo Global and Alchemy.

INVESTOR MOOD SHIFT

Private equity companies buy businesses and aim to sell them or list them on the stock market at a profit. A

2010 study from Cass Business School found private equity-backed listings outperformed in the longer term. But a few more recent high-profile flops have left investors with a bad taste.

British department store Debenhams is a much cited example. It plunged 14 percent in the weeks

following its May 2006 listing and hasn't traded above its offer price since November that year. Any

investors who bought when it listed and still hold their stock are now sitting on a 57 percent loss.

But a strong performance from some London listings in the past few months and a 9 percent rise in Britain'sFTSE 100 .FTSE blue chip index this year have helped to increase investors' willingness to consider offerings more broadly, including private equity-backed share sales. Insurer Direct Line has risen 17 percent since its October flotation, while Crest Nicholson is up 22 percent.

"UK investors were perceived to be less amenable to private equity-backed assets than, for example, their US counterparts and that is why you have seen a very active flow of IPO activity in the US by privateequity and less in the UK," Lorcan O'Shea, Managing Director and head of UK Equity Capital Markets at

Deutsche Bank, said. "That has definitely thawed very noticeably."Several bankers said British investors had been showing more interest in companies being brought toLondon, while US investors, who had been steering clear of Europe as the euro zone crisis was unfolding,were also beginning to look for opportunities again.

An Ernst & Young survey of investors worldwide last month found Britain was their preferred Europeaninvestment destination, with attractive pricing considered the most critical success factor for listings. Thatview was echoed by the head of equities at one large British fund manager. "When they're priced to go,then people get interested," he said. "Crest was very cheap, Direct Line was very cheap."



Article 2 : Zara and fast fashion

November 9, 2012 (extract)

How Zara Grew Into the World’s Largest Fashion Retailer, By SUZY HANSEN

Inditex is a pioneer among “fast fashion” companies, which essentially imitate the latest fashions and speed their cheaper versions into stores. Every one of Inditex’s brands — Zara, Zara Home, Bershka, MassimoDutti, Oysho, Stradivarius, Pull & Bear and Uterqüe — follow the Zara template: trendy and decently made but inexpensive products sold in beautiful, high-end-looking stores. Zara’s prices are similar to those of theGap.

Inditex now makes 840 million garments a year and has around 5,900 stores in 85 countries, though thatnumber is always changing because Inditex has in recent years opened more than a store a day, or about500 stores a year. Right now there are around 4,400 stores in Europe, and almost 2,000 in Spain alone.Inditex’s main rivals are way behind. Arcadia Group, which owns Topshop, among others, has about 3,000stores worldwide; H&M, based in Sweden, has 2,500 (when you include its smaller lines of stores); and Mango, based in Spain, 2,400.

A traditional ready-to-wear fashion company in the West sends the designs for its clothes to independentfactories in countries like China and India, where the labor to make them is cheap. These clothes are thenshipped back and stocked in stores in spring and fall, with smaller shipments throughout the year. But a brand at Inditex will make a fall collection, for example, and then ship only three or four dresses or shirts or jackets in each style to a store. There’s very little leftover stock, few extra-smalls or mediums hiding in the back. But store managers can request more if there’s demand. They also monitor customers’ reactions, onthe basis of what they buy and don’t buy, and what they say to a sales clerk: “I like this scooped collar” or “I hate zippers at the ankles.” Inditex says its sales staff is trained to draw out these sorts of comments fromtheir customers. Every day, store managers report this information to headquarters, where it is thentransmitted to a vast team of in-house designers, who quickly develop new designs and send them tofactories to be turned into clothes.

More than half of Inditex’s manufacturing takes place either in the factories it owns or within proximity to

company headquarters, which is to say in Europe or Northern Africa. Inditex owns factories in Spain and outsources production to factories in Portugal, Morocco and Turkey — considered costly labor markets,typically. The rest of its clothes are produced in China, Bangladesh, Vietnam and Brazil, among other countries. The trendiest items are made closest to home, however, so that the production process, from startto finish, takes only two to three weeks. Inditex’s higher labor costs are offset by greater flexibility — noextra inventory lying around — and on faster turnaround speed.

That means that if Inditex stores in London, Tokyo and São Paulo all have customers respondingenthusiastically to, let’s say, sequined cranberry-colored hot pants, Inditex can deliver more of these, or avariation on hot pants, sequins or that cranberry color, to stores within three weeks. The company tries tokeep the stock fresh; one promise its stores make is that you will always be buying something nearlyunique. Merchandise moves incredibly quickly, even by fast-fashion standards. All those thousands of Inditex stores receive deliveries of new clothes twice a week.

In this way, says Masoud Golsorkhi, the editor of Tank, a London magazine about culture and fashion,Inditex has completely changed consumer behavior. “When you went to Gucci or Chanel in October, youknew the chances were good that clothes would still be there in February,” he says. “With Zara, you knowthat if you don’t buy it, right then and there, within 11 days the entire stock will change. You buy it now or never. And because the prices are so low, you buy it now.”

Inditex owes none of its success to advertising. That’s because Inditex doesn’t advertise. It hardly even hasa marketing department, and it doesn’t engage in flashy campaigns, as its competitors do, teaming up withfashion designers like Stella McCartney, Karl Lagerfeld, Martin Margiela and Marni. Zara’s designers arecompletely anonymous; some would say this is because they are copiers rather than designers.

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The marketing Inditex does do is all about real estate. The company invests heavily in the beauty, historicalappeal and location of its shops.

In the last five years, Inditex’s overall sales have grown to 13.8 billion euros a year from 9.4 billion euros.Profit has risen to almost 2 billion euros a year. The company expanded to 110,000 employees in 2011,from around 80,000 in 2007. In short, while Spain has been suffering through real estate and debt crises(following the global financial crisis), Inditex has prospered.

Fast fashion has also become more hip in recent years; even celebrities like Kate Middleton have been photographed wearing Zara. “It’s generally the way the retail market is going — it’s not just Zara,” saysIsabel Cavill, a senior analyst with Planet Retail, a consulting firm based in London. “There’s a bit of cachet in picking up something that looks like £500 for £50.” If people compliment your nice dress, youcan proudly boast that you got it for a steal.

Increasingly, H&M and Mango have raced to keep up with Zara. But the Inditex effect is not confined tocheap, fast fashion. It has forced — or inspired, depending on how you look at it — people to spend their money in a different manner. In Zara, every purchase is an impulse buy; there’s no longer any saving up for that gorgeous leather jacket in the window. You are buying clothes not because you love them, but because,at $50, those hot pants are as cheap as Sunday brunch for two — and likely to be gone in a matter of days.It’s a way of consumption that has conditioned buyers to expect this up-to-the-minute trendiness and variety in higher-end labels as well. “They broke up a century-old biannual cycle of fashion,” Golsorkhi

says. “Now, pretty much half of the high-end fashion companies” — Prada and Louis Vuitton, for example — “make four to six collections instead of two each year. That’s absolutely because of Zara.”

The Zara headquarters is a huge airplane-hangar-size open space, with regional sales managers sitting at aline of desks running down the middle, designers on either side of them. The managers field calls fromChina or Chile to learn what’s selling, then they meet with the designers and decide whether there’s a trend.In this way, Inditex takes the fashion pulse of the world. “The manager will say, ‘My customers are askingfor red trousers,’ and if it’s the same demand in Istanbul, New York and Tokyo, that means it’s a globaltrend, so they know to produce more red pants,” the P.R. person said.

Inditex denies that it copies other designers. Yet in The New York Times last March, Alexandra Jacobsdescribed a visit to the new Zara store on Fifth Avenue in New York, where she was reminded of Prada,Alexander Wang, Balmain and many other high-end brands. Christian Louboutin took Inditex to court for selling the company’s signature red-soled shoes but lost, mainly because Inditex takes care to change itsdesigns just enough to evade copyright laws. “To the luxury brands, they are copycats, they are likemushrooms feeding off the main body of fashion,” Golsorkhi says. “I was of the same mind myself, but Ihave grown out of that because I realize that the fashion companies also copy each other. In the end, noone’s original.”

H&M also delivers frequent shipments of new items and imitates the latest trends. But even H&M offersoriginal collections by famous fashion designers. Inditex has discovered it doesn’t need to.

http://www.nytimes.com/2012/03/29/fashion/at-zara-in-midtown-its-all-a-tribute.html

http://www.nytimes.com/2012/03/29/fashion/at-zara-in-midtown-its-all-a-tribute.html



Article 3 : Can UK firms make it in the US?

Business17 April 2013 (extract)

When Britain's largest supermarket chain opened in California six years ago, there was talk of revolutionising the way Americans shop and bringing fresh, wholesome food to all neighbourhoods, richand poor. The stores had only self-checkouts, for example, an unusual concept in the US where Americanswere used to being helped by a clerk, and typically having someone bag their groceries for them, or at leastoffer to help.

But on Wednesday, Tesco announced it would be abandoning its 199 Fresh & Easy stores, which are

all on America's West Coast.

Critics say the chain miscalculated the market and failed to cater to American tastes. It has been anexpensive mistake, costing Tesco £1.2bn. "My sense is that what they tried to do was make a Europeanmodel," says Prof Anthony Dukes, at the USC Marshall School of Business. "Europeans tend to make morefrequent trips to grocery stores, maybe every day or every other day, where Americans are used to goingfor bigger trips less frequently," he says, adding that busy Americans prefer to buy in bulk.

Cracking the US market

Nearly half of British retailers believe the US remains the hardest market in which to achieve

commercial success, according to the findings of a survey released by Barclays last week. Despite a

shared language and heritage, Britons view the US as more difficult to master than China, which

ranked second in the survey.

"The mistake many British retailers have made is to treat the US as one country," says Richard Lowe, head of retail at Barclays. "The US is a little bit like Europe. When you go there you have be more targeted."Different states are not exactly like different countries, but they have very different markets."

According to Prof Dukes, Fresh & Easy's shop-more-often convenience store format may have worked better on the East Coast of America. "The East Coast is denser and has perhaps more pedestrian traffic, onthe West Coast we have more cars. That might make a difference," he says.

But some UK retailers have had great commercial success in the US, and getting the location right played a big part, analysts say.

Pret's success in New York

Despite its French name, most people seem aware that Pret is actually British..Some point out that the prices aren't always that cheap, but as one customer puts it, "This is New York, nothing's that cheap."

Topshop now has four stores here including a new 25,000 sq-foot store in Los Angeles. Its boss Sir PhilipGreen has decided to concentrate on big cities and has said he hopes to turn the fashion into a $1bn US business in the next five years.

And it is difficult to walk a few blocks in Manhattan without stumbling on a Pret A Manger restaurant.

The chain has purposely grown gradually since it launched in 2000 and now has 34 locations in New York

City, with another opening soon; seven in both Washington DC and Chicago and two in Boston.

Pret A Manger's choice of New York as its entry point to America was a shrewd one, according to FaithHope Consolo, chair of the retail group at Douglas Elliman Real Estate, which advises internationalretailers looking to enter the US.

"London and New York are so similar in many ways, both demographically and architecturally. Both citiesare on the go, with a desire for quick meals, not fast-food," she says. "Pret A Manger satisfies that. [Itoffers] quality food, but also the ability to grab it and go.

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The packaged sandwich chain has also tailored its UK products to the local market, according to itsmarketing director Mark Palmer. "Rather than crayfish and rocket sandwich on sale in the UK, Pret has aMaryland spiced shrimp and spinach sandwich in the US," he tells BBC News. "Pret has also learned thatthere is a distinctive difference in the coffee tastes in the US. In the UK Pret sells more cappuccinos and lattes than the US, the US customers prefer filter - or drip - coffee."

'Unfortunate timing'

Fresh & Easy did its homework. It hired anthropologists and studied Californians' eating and shoppinghabits.

Its stores opened to great fanfare in neighbourhoods around California considered "food deserts,"dominated by the cheap, fast-food driving America's obesity epidemic.

That noble goal to locate in gentrifying and poor neighbourhoods may have hurt their prospects, says BryanRoberts, the UK-based director of retail insights for Kantar Retail.

"No doubt they made some fundamental mistakes in terms of store locations, merchandise and marketing,"Mr Roberts says, adding that the recession played a big part in Tesco's failings in the United States.

"Not to absolve responsibility from Tesco but it was unfortunate timing. No one could have predicted thesub-prime crisis and the consequences of it. If they'd timed it five years earlier, it might have been adifferent story."

It is also worth noting that the stores' smaller, neighbourhood market feel is one being adopted by megadiscount retailer Wal-Mart.

Business17 April 2013 (extract)

Tesco's annual profits have fallen for the first time in almost 20 years, as the UK's biggest supermarketconfirmed it was pulling out of the US. Tesco is exiting its US chain of 199 Fresh & Easy shops, whichhave never made a profit, at a cost of £1.2bn. The company's statutory pre-tax profits fell 51% to £1.96bn, but post-tax profits including the cost of the US exit were just £120m, down 95.7%.

The world's third-largest supermarket group, which reported a shock profit warning in January last year,has been restructuring under chief executive Philip Clarke. As well as the US withdrawal, Tesco is exiting

Japan and said it would take "a more measured approach to our growth in China".

Mr Clarke said: "The announcements made today are natural consequences of the strategic changes we first began over a year ago and which conclude today. With profound and rapid change in the way consumerslive their lives, our objective is to be the best multichannel retailer for customers."

A £804m write-down in the UK property portfolio comes after a review in which Tesco identified

more than 100 sites, bought mainly during the property boom more than five years ago, which the

company no longer plans to develop.

Tesco is shifting its focus away from out-of-town stores and many of the properties will not be needed. Mr Clarke said: "The large stores we have are great, but we won't need many more of them because growth infuture will be multichannel - a combination of big stores, local convenience stores and online."

For the year, total UK sales rose 1.8% to just over £48bn, with UK trading profit falling by 8.3% to

£2.27bn. The company last reported a fall in annual profits in 1994.Changing landscape

Ajay Bhalla, professor of global innovation management at Cass Business School, said :"While Tesco paid

attention to making its US venture work, the UK retail market evolved quickly. Customer service

and quality gained the upper hand over low pricing, and Waitrose and Sainsbury's emerged as thepreferable destination for the growing middle-class segment...Tesco's exit from the US is a reminder for managers of the dangers of going blindly for scale and cost leaders, the wheels of which are difficult toreverse if you need to change course to becoming a retailer known for first-class customer experience".





Article 4 : How John Lewis found fashion

How John Lewis found fashion and became never knowingly underdressed The Observer, Sunday 10 March 2013 (extract)

Fashionistas queuing round the block, a sell-out designer collection and breathless reviews by the style press. Can this really be John Lewis? As 84,700 partners working at the department stores celebrate their 17% bonus this weekend, they can rest assured they are back in fashion in a big way. A 9% rise in

clothing sales helped drive a bumper year for John Lewis as it increased its market share, mainly at

Marks & Spencer's expense. The chain accounted for 2.1% of the UK clothing market in 2012, accordingto retail analysts Verdict, 10% up on a year before.

Once associated with sensible knitwear and cosy slippers, the 40-store chain has polished up its fashioncredentials through designer collaborations, classy own-label products and the addition of upmarket brandsthat had previously steered clear of the store.

As a result, fashion sales topped £1.1bn last year – up from about £700m in 2005. That's still only about aquarter of what Marks & Spencer sells, but it indicates the kind of growth that rivals can only dream of inthe economic downturn.

Under the guidance of buying and brand director Peter Ruis, who took charge of fashion in 2007, JohnLewis has created a buzz by recognising that shoppers of all ages now want to look trendy – and that older customers no longer want gold buttons and elasticated waistbands.

Sitting in the John Lewis Christmas room surrounded by some very classy Alice Temperley lingerie as wellas cute sparkly kids' dresses – and, of course, an array of tweed slippers – Ruis says: "Everything's ageless

these days."

John Lewis's Somerset by Alice Temperley range is a case in point. Now in its second season, the

British designer's collection is already the store's biggest own-label and its fastest-selling brand ever.But the fashionistas who line up outside the Oxford Street store and battle for popular items online form a

broad church. "We see people in their 50s and 60s wearing it, as well as people in their 20s," Ruis says.Its new Kin brand also takes on that concept. Its collection of simple, relatively low-cost pieces

includes outfits for children similar to those aimed at their parents and grandparents.

He says John Lewis has strong market share in all age groups over 25, with a particular "sweet spot" among35-to-44-year-olds. That demographic includes trendy urbanites who go to John Lewis to buy an iPad and stop to buy some clothes too. The store's combination of homewares, technology, beauty and fashion has,Ruis says, been vital in helping the business through tough times on the high street.

Instead of worrying about ageing shoppers, he sees an opportunity in the fact that people feel less defined by their age: "The 40s and 50s are the prime of life. People are having kids later, and taking out mortgageslater."

A stylish and well-groomed 44 with three children aged between four and 11, Ruis is a good example of that modern John Lewis customer. He believes the generation that grew up loving brands such as Topshop,Whistles, Ted Baker and Topman don't feel the need to swap to the classic labels that once formed the backbone of a typical department store.

So in the past seven years, John Lewis has edited out traditional, conservative labels such as German brand Basler and British "mother-of-the-bride" classics Jacques Vert and Alexon, and transformed itself into akind of indoor high street, but with a grown-up aesthetic.

Ruis say the company works closely with brands to ensure their stock reflects what its customers want:"It's less likely to be the most overt partygoing outfit of a 16-to-24-year-old. Those shoppers have less

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income, and the higher cost of going to university means there is less and less business there

anyway."

John Lewis fashion floors now mix the likes of Jaeger, Hobbs, Mango and Whistles with smaller brandssuch as Toast and Fenn Wright Manson. Prices have stretched up to Ralph Lauren levels, and down to thecheaper Kin.

Somerset and Kin are the department store's newest and most adventurous creations, designed to

suit a different kind of customer from those who would wear the classic John Lewis Collection or

John Lewis & Co menswear.

"We have now started to find our feet on own brands. In the first few years we were getting the core rangeright, but last year we got a bit more feisty and fun," Ruis says. "We have taken the customer with us, and the more fashionable we get, the more interested they become."

He predicts that own-label will move up from about 30% of John Lewis fashion sales today to 35%

or 40% as Somerset and Kin expand. This autumn, there will be a 50% bigger range of Kin clothing

in stores and Somerset will expand into lingerie for Christmas, as well as cashmere, kidswear and

even, eventually, home textiles and electricals.

Ruis is also in talks about bringing in a new designer name for menswear but says that despite the successof the Temperley range, he won't be signing a whole catwalk of collaborators, Debenhams-style. "I'd hate

to have 20 or 30 of them and lose our point of view," Ruis says.The Temperley range hasn't been the only hot success. Ruis says sales of John Lewis & Co menswear shotup 20% after advertising featuring a long-haired bearded model proved controversial. A certain newspaper may have described the model as a "gingery tramp", but Ruis says shoppers were won over by the clothing,and menswear sales increased faster than womenswear over the year.

Ruis, clad in a slimline Burberry Prorsum suit with a Richard James shirt and Grenson shoes, says men aremore interested in fashion than they ever used to be. While it was once accepted that 80% of men's clotheswere bought by their partners and mums, now men in their 40s are happy to shop for themselves.

Yet it's not even metrosexual urbanites who are the main drivers behind John Lewis's fashion

explosion. What is? The internet, of course.

Sales of clothing in stores rose 3% last year, thanks partly to additional floor space. There are plans to add a

further 10% of fashion square-footage by 2020 as John Lewis puts fashion into more stores. But that is allsmall beer compared with online growth.

In the year to 26 January, online fashion sales increased 41%, and the Temperley range sold three times asmuch on the internet as it did at the Oxford Street store. Ruis suggests it could have sold more had there been more stock in the warehouse.

There is no doubt that John Lewis's highly effective online operation has brought the brand to a much wider customer base – people who would never have dreamed of buying their dream outfit in an emporium thatalso sells irons, bedlinen and curtain rails.



Article 5: M&S clothing sales continue to fallPublished: July 9 2013

BusinessMarks and Spencer has reported a 0.3% rise in underlying UK sales for the latest quarter, as strong food sales offset a fall in clothing sales. UK like-for-like sales rose 1.8% at its food business, but generalmerchandise - which includes clothing, footwear and homewares - fell 1.6%. It is the eighth consecutive

quarter of falling sales for general merchandise.

Meanwhile, about 800 shareholders quizzed management at its annual meeting in Wembley Stadium.Perhaps to convince them of the company's new style, a fashion show was held on a catwalk for the firsttime. Chief executive Marc Bolland has recently revamped the clothing division to try to boost flaggingsales. Shareholders demanded to know when they would see the results.

"We do not want to disguise that we're not happy," said Mr Bolland. "I want to be very candid and honestthat this is still unsatisfactory. We've got a very clear plan to address it." M&S shares closed 1.4% lower at453.20p.

Clothing 'bedrock'

Last year, M&S changed its retail team, bringing in Belinda Earl, a former chief executive of bothDebenhams and Jaeger, as head of style. In May, the company unveiled a new clothing collection and strategy.

Analysts say a lot depends on this year's autumn and winter collection, which goes on sale later this

month and has received good reviews from the fashion press.

"Clothing is the bedrock of the business, particularly womenswear," Bryan Roberts, retail analyst at Kantar retail told the BBC's Today programme. "Without it, the business will struggle.

"It's one thing to impress fashion journalists and City types, but another thing to impress young families

and grandparents, the broader audience that M&S is trying to appeal to. "If it comes to Christmas and clothing still hasn't recovered, the knives might come out for Mr Bolland."

'Sea of merchandise'

However, Neil Saunders from the retail consultancy Conlumino suggested it was not the actual clothes thatwere the problem, it was the layout of the stores. "The big issue for M&S is... within the store

environment, collections lose their creative integrity and become subsumed by a sea of merchandise,"

he said.

"This is exacerbated by a lacklustre shop fit and point-of-sale material, which is positively off-putting for many younger and young-at-heart consumers who may otherwise be interested in the items on offer."

However, he added that he was encouraged by the "extremely robust" sales in food.

Overall, total group sales rose 3.3% in the 13 weeks to 29 June - helped by a near-30% increase in online

sales and an 8.7% rise in international sales.

Mr Saunders said that this "reflects the considerable investments made across these areas of business". Hemaintained his view that "there will be further sales progress on both of these fronts across the remainder of this financial year and beyond".

The problems in the eurozone affected sales in some areas, but M&S said its performance in this region had started to stabilise. It added that, given challenging trading conditions, it remained cautious about theoutlook.





Article 6 : M&S gears up to face online challenge alone

February 8, 2011 (extract)

A high street heavyweight, Marks and Spencer is still only an infant on the internet: its £413m online saleslast year make up only about 5 per cent of its total UK sales. Now Marc Bolland, chief executive, is

bolstering its online presence by poaching Laura Wade-Gery, chief executive of Tesco’s online

business, to fill the newly formed board post of executive director of multichannel and e-commerce.

Her task is formidable. The first step – crucial to meet the online sales target of £800m-£1bn by 2013-14 – will be to improve the existing website. Beyond that lies the daunting question of whether it is possible tooffer a full-blown M&S food service online in a way that makes commercial sense. M&S’s limited onlinefood offering contrasts starkly with the service from online grocers such as Tesco Direct or Ocado. Onlytwo of M&S’s online food categories – sushi and sandwiches – can be collected from stores in two days’time, while anything more elaborate takes longer.

Analysts describe the M&S website as “lacklustre” and “underwhelming”. At Next, the shoes menu

instantly offers 35 different categories; the M&S equivalent is seven, and four of those are slippers.

One reason M&S has struggled is that it outsourced its website to Amazon. When the deal was struck, inApril 2005, M&S said it was using outside expertise to catch up with rivals. But the arrangement has

seemed increasingly odd and knowing the deal is due to end in 2013 has held back investment.

“M&S has been hamstrung,” says Neil Saunders, consulting director at Verdict. Analysts say the retailer now has a great opportunity to promote non-food online sales, simply by turning the site from functional toattractive. “M&S has very good products. Its problem is that it can’t get its entire range into all its stores,”Mr Saunders says. The site already complements the stores, for example by stocking less popular

clothing sizes and showcasing categories such as home and furniture, which may not command much

space in stores. It also answers the old complaint that, as one observer puts it, customers must “fight

through four aisles of grey slacks” to reach the fashion ranges.

The strategic opportunity lies, however, in the prospect of putting M&S food online. “M&S has a

fantastic brand and high-quality food that is innovative and exclusive,” says Clive Black, a retailanalyst at Shore Capital.

He points out that the situations of many M&S stores, in high street sites that lack car parking, make itdifficult for customers to buy more food than they can comfortably carry, even if the range were to beavailable to them.

But online grocery – as many loss-making operations can testify – is difficult. For M&S, it would

pose particular challenges. First, according to Katherine Wynne, a retail analyst at Investec, there is

a problem with volume. M&S is “a top-up shop, not a weekly shop”, making it harder to turn a

profit on each delivery, she says.

Then there is the cost of a delivery network to meet the needs of M&S’s famously demanding

customers. Mr Saunders reckons the group would be “mad” to embark, even in the medium-term, ona home-delivery service.

Instead, he says, M&S should build on the ways its shoppers can already pick up pre-ordered items

from a convenient store.“This ‘clickand-collect’ approach works well for John Lewis,” he says.

“These customers are especially valuable, because when they are in the stores they often buy other

items as well.”



Article 7 : IMF downgrades Eurozone growth

Tuesday 9 July 2013 (extract)

Britain is on course to grow at a faster pace than expected this year, the International Monetary Fund (IMF)said on Tuesday, despite signalling weaker growth across much of the developing world, the eurozone and the US.

The UK economy will expand by 0.9% against the previous forecast of 0.6%, according to the Washington- based organisation in its quarterly global financial health check. But a lacklustre performance bydeveloping countries, a prolonged eurozone recession and US spending cuts will restrict Britain's GDPgrowth in 2014 to 1.5%, it added.

While the IMF has become more optimistic about the UK, it has cut its global growth forecast from 3.3% to3.1% this year and from 4% to 3.8% for 2014. It cites weak demand and slower growth in key emergingmarket economies, and a longer than expected recession in the eurozone.

The international lender of last resort, which has supported bailouts of Greece, Portugal and Ireland, took eurozone leaders to task, urging them to make strides to a closer banking union to ease fears of further bank

collapses.

It called on Brussels to walk the tightrope between cutting public expenditure to pay down debt on onehand and spurring growth with policies to boost business investment and consumer demand on the other."Policies to reduce financial market fragmentation, support demand, and reform product and labour marketsare also crucial for stronger growth and job creation," it said.

The IMF downgraded its forecast for the eurozone from a 0.4% contraction to 0.6% this year, and

expects a return to growth in 2014 but at a weak 0.9%, lower than the 1% it had previously

predicted.

http://www.guardian.co.uk/business/imf

http://www.guardian.co.uk/

http://www.guardian.co.uk/business/imf




Article 8 : Debenhams cross-channel sales

May 2011 (extract)

Debenhams has just announced an 82.4% growth in its Direct business. Emma Herrod speaks toSimon Forster, Head of Online Trading, about what is driving that expansion. Simon Forster [IRDXISFO] puts this phenomenal growth down to two things: having the right team in place and increasing thenumber of access points through which customers can buy from the company.

The Team

“We trade the site quite hard,” says Forster, explaining how the entire team is focused on sales, so everyonehas responsibility for the customer experience. And, while Debenhams’ dotcom operation is a separate

division of Debenhams plc, to allow it to focus on growing channels, it works hand-in-hand with the restof the business functions and will eventually be fully integrated. In fact, around 50% of Forster’s time is

spent liaising with other areas of the company.

Product experts from other parts of Debenhams have been brought into the ecommerce team.He says:“If wesend out an email about dresses then we need the knowledge to pick the right product, combined withecommerce’s experience of delivering the email. If a product is on rotation on the homepage theclickthroughs will tell us pretty quickly whether or not customers are interested in the product.”

He adds:“The customer doesn’t buy from us because it’s a website, they want that product. Ecommerce is aretail business, not a website.” So while Direct has a separate focus in the business, the customer sees onlythe Debenhams brand.

It has also invested a lot in a strong customer acquisition team and through digital marketing channels suchas search.“We don’t do much above the line advertising,” says Forster, although its website is included inall the retailer’s advertising.

The second factor that has fuelled Direct’s growth – the increase in the number of access points –includes a collect-from-store service, in-store ordering and mobile apps.

Behind the scenes

Debenhams is concentrating on a cross-channel future for the business. Forster says he has been lucky inhaving strong support from the board.This will continue when the current Deputy Chief Executive, MichaelSharp,assumes the role of CEO from 5 September this year.“His view is to trade the business,” saysForster.

Cross-Channel thinking

“The organisation is becoming seamless [as far as the cross-channel customer experience is concerned],”says Forster. Shop assistants should be able to make a sale regardless of where the stock is located and thisis one of the reasons that self-service kiosks are being rolled out across the department store chain. The

touch screen devices have been installed in 24 stores to date with full roll-out expected to be completed bythe autumn. “They will be a massive move on again for our customers,” says Forster, since the kiosksenable shop assistants to help customers order out-of stock or home delivery items. The obvious advantagefor the smaller stores is that customers will have access to a broader range of products.

The kiosks don’t use the same interface as the website. It’s ‘a big-button’ solution like the smartphoneapps, according to Forster. Customers using the kiosks generally know what product they want to see

and want to navigate to it quickly. Initially, they will be used with the assistance of store staff but Forster is hopeful that customers will be comfortable using them on their own in future. He explains:“If we have

http://internetretailing.net/people/isfo/






the interface right customers will want to use it [the kiosk] themselves. If not, we’ll know we’ve got theinterface wrong.”

The retailer has also developed a mobile strategy. It launched SMS marketing in September last year and rolled out mobile vouchering and a fully transactional iPhone app in October. The company had highexpectations of the app and it hasn’t been disappointed, since the initial investment was paid back within just three weeks of its launch.

Alongside shopping functionality with multiple product images and reviews, the app has added

options and cross-channel functions: a wishlist; a link to Debenhams TV; a store finder which gives

location details; and the ability to enter a postcode to get the opening times of local stores with a link

enabling users to call the store. There is also a scanner for reading barcodes in store and QR codes to

enable customers to obtain further information. Codes are currently being used in shop windows and

in advertising.

To date, the iPhone app has been downloaded 400,000 times and the avalanche of downloads shows nosign of abating.“Every week we are seeing a consistent number of people downloading the apps,” saysForster,who reveals that it had come second to Amazon by only 0.1% in a recent app usability study byeDigitalResearch. Over five months, the iPhone app has:

• brought in £1m sales;

• been launched 2.4m times;

• been used more than five times by one third of users;

• accounted for 15,000 days of usage (equivalent to each session lasting nine minutes);

• been used to scan 90,000 barcodes;

• been used across channels, for example, to find stores;

• extended the shopping day with peak usage at 10pm compared with the online shopping peak of 7-8pm.

Harriet Williams, strategy and online marketing controller at Debenhams, told delegates at the recentInternet Retailing Expo that 17% of customers buy directly via the iPhone app and 30% go on to purchasein store.

Another example of the impact of smartphones on the retail business comes from a test using the samevoucher offer sent by email, text and on paper to customers in October 2010.The mobile voucher drove agreater percentage of recipients into a store.

The iPhone app has also generated an uplift in basket value since this shopper segment has a higher averageorder value than online customers. The largest order in one transaction stands at £1,500.According toWilliams, initial analysis of m-commerce sales shows that the majority of app shoppers are new customersand so represent incremental sales.

Customers need to see the same product information across all channels but formatted in a way that’s easyto read on a mobile, so Debenhams runs one content management system that can send information to

all channels. There’s also one stock file for all channels and the retailer is working towards having a singleview of the customer.“We do have a long way to go though,”admits Forster.

When asked about the proliferation of channels and whether this is changing customer habits, Forster responds that “customers aren’t opting for channels, they’ll want to use both”. The example of furniture buyers using multiple channels to research, view, sit on and purchase illustrates his point.“There’s

an‘and’culture for channels not ‘or’ so retailers need to consider all of the options,”he adds.Debenhams & other online developments

Customers can buy any product through highlighted click-to-buy buttons on Debenhams TV. ThoughForster says:“TV is a good example where customers will access the website not just for purchasing.”Thechannel launched in late October 2010 with the aim of giving customers a fresh alternative to the traditional browse and buy online experience. Its footage includes interviews with designers, such as Ben de Lisi,Henry Holland and Matthew Williamson, who work with the brand, to fashion advice from the retailer’s product range experts.



Article 9: Putting e-commerce at the heart of John Lewis’s

Business Strategy

2012 case study of the year (extract)

This paper sets out some of the leading and fundamental e-commerce decisions John Lewis has taken and

implemented across 2010-2011, decisions that have led to 25 consecutive months of outperforming online

market growth.

John Lewis is the UK’s favourite department store, a brand famous for its Never Knowingly Undersold

commitment and for inspiring genuine affection in its customers. It has 35 shops, over 27,000 John Lewis

partners and an award-winning website. It currently sells the biggest range of products of any UK high

street retailer.

In early 2010, John Lewis saw that despite having an incredible 350,000 product categories most customers

visited on average only twice per year. It was also clear that there was significant potential to increase

online annual sales by creating opportunities for customers to interact with the brand through new and

multiple touch points. Indeed it was apparent that a multi-channel customer was worth on average 3.3 times

more than a shop-only customer shopping on average 6 times per year.

As a result of this, and the consumer trend for browsing and purchasing online, John Lewis refocused its

strategy and made e-commerce growth its single highest priority, setting a new commercial objective to

increase online annual sales from £393m in 2009/2010 to £685m through online channels by 2011.

The journey so far has taken John Lewis from a department store with a mediocre online business to

become one of the top e-tailers in the UK with online sales growing by at least 27% per year over the

period 2010/2011. On the busiest day, johnlewis.com took an order on the website every 1.9 seconds. John

Lewis also grew its multichannel customers in 2010 from 7.3% to 12.67% of the total customer base and in

2011 to 15.75%, an increase of 27%.

PUTTING E-COMMERCE AT THE HEART OF JOHN LEWIS’ BUSINESS STRATEGY

Across 2010-2011 the power of e-commerce was harnessed by a series of initiatives that have helped the

John Lewis brand achieve an incredible sales return and significantly outperform market averages, despite

being a mid-premium retailer trading through a very tough recession:

The emergence of John Lewis as an e-commerce leader among retailers has been driven by .. core

strategies:

1. A change in its trading strategy, to be Never Knowingly Undersold, across multiple channels.



2. A determination to make John Lewis more convenient for customers and the development of compelling

content to attract customers as they engage via different digital channels.

1. BRINGING THE JOHN LEWIS BRAND INTO A MULTI-CHANNEL WORLD

Never Knowingly Undersold has been John Lewis’s core trading philosophy since the 1920s. Part of Never

Knowingly Undersold has been a proactive price matching promise that means John Lewis customers can

shop in the knowledge that they cannot find a similar product with same price, service and quality

anywhere on the high street. In September 2010 a key decision was made to extend Never Knowingly

Undersold to apply to online sales. With a potential associated risk of £50m, this was a huge statement

within John Lewis that e-commerce was of vital importance to its customers and to its brand and was a

signal of a business determined to embrace it.

The immediate effects of this new policy were shown in sales and market share, particularly within our

Electrical Home Technology category e.g. white goods went from challenging year on year numbers to

significant double digit growth.

2. CREATING CONVENIENT E-COMMERCE SERVICES TO EXCITE AND EXPAND THE

EXISTING CUSTOMER BASE

Below are outlined some of the key strategic initiatives which have helped to boost John Lewis profits and

to enhance customer experience.

1. Fashion: an e-commerce success story.

At the end of 2009 John Lewis re-launched johnlewis.com/fashion with a dramatic makeover proclaiming

its ambition to rival the biggest online fashion retailers in the industry.

Since September 2009 John Lewis has focused on creating a user friendly, fresh-looking fashion category

that appeals to a more fashion forward customer. Over 100 ‘brand shops’ were introduced selling a huge

variety of products from Barbour through to Mulberry and Ralph Lauren to Diesel.

Guest editors were commissioned to create inspiring catwalk trend previews and ‘Get the look’ guides to

help provide an effortlessly enjoyable user-experience for customers exploring the range of over 300

brands.

Innovative new online marketing programmes were developed including contextually linked advertising

and the UK’s first geo-climatic banners for JL fashion.

The results proved sensational. In 2010/2011 Fashion accounted for 25% of johnlewis.com sales. This

financial year 2011/12 Fashion will end at nearly one third of the total sales due to the growth and

success of the online offer. Fashion also accounted for more than 25 per cent of the total online profit in

2010/2011, up 7 per cent on the previous year.



By the end of autumn/winter 2011 John Lewis had launched over 55,000 fashion products online.

Johnlewis.com was now rivalling the ranges of leading pureplay fashion retailers.

2. Launch of facebook, Twitter and Youtube.

In 2010 John Lewis launched channels on Facebook, Twitter & You Tube. Launching in October 2010,

Facebook fans have grown to 339,085 today. Twitter followers have seen dramatic growth to 20,000 in the

same period.

Customers have used these spaces to form their own community backed by a customer service function

ready to answer any questions they have. We have also offered ‘always on’ content to our customers

promoting events around the country in stores, allowing customers to choose their charity of the month and

welcoming guest editors from Grazia journalists to online bloggers hosting the page on key topics our

customers want to hear about. Partners have also played their part by holding ‘surgeries’ on specific topics

like new product launches and ‘how tos’.

We have integrated our seasonal Marketing campaigns into social too. November 2011, saw the launch of

the much anticipated annual John Lewis Christmas advert across social media channels 36 hours before it

was aired on television. The advert became an overnight success, inspiring countless emotional responses

and mounting excitement throughout John Lewis’s online communities. The figures below demonstrate the

tremendous success of this innovative approach:

• 4,085,250 views on YouTube, with 18,702 likes and 926 dislikes becoming the third most popular

video on YouTube worldwide during launch week.

• 347,979 total social media shares (figure from Campaign)

• Mentioned in 334,248 Facebook updates (figure from Campaign)

• 484 blog posts. (figure from Campaign)

• 29,173 mentions of John Lewis on Twitter for the week since launch on 11/11/11 (against the

previous week's 2,879 mentions)

John Lewis launched a competition called ‘Guess the gift’ in support of the TV advert whereby various

children were filmed for johnlewis.com describing one of the top John Lewis Christmas products.

Participating customers were asked to guess the identity of the product and, if they guessed correctly, were

awarded the gift as a prize. The competition was promoted across all channels including Facebook, YouTube and Twitter with a phenomenal rate of entries and customer engagement.

3. Launching Click & Collect – a revolution of convenience.

Launched in early 2009 this stress-free delivery option, available online, in shops and by phone allows

customers to make an order by 7pm and collect their orders, from their chosen John Lewis store, from 2pm

the following day.



In 2011 John Lewis’ popular Click and Collect service saw nearly 1,500,000 orders processed. With over

150,000 products available for next day collection, Click and Collect now accounts for 22% of all orders

(compared to 16% for the same period last year, Jan-Dec 2010).

In October 2011 John Lewis extended click and collect to include an additional 94 Waitrose stores, adding

significantly to the convenience of the service for customers. Waitrose deliveries now form 25% of all the

orders which are placed through our click and collect channels. Another 100 are planned for this year given

this success.

4. Redefining window shopping – turning windows into direct selling tools.

In November 2011 John Lewis trialled a whole new dimension in ‘window shopping’. Customers

passing a window display in Brighton Waitrose were encouraged to scan QR codes with their iPhones

to purchase featured items via johnlewis.com mobile site.

John Lewis also rolled out virtual window displays in seven shops for the duration of the clearance

period, allowing the retailer, which does not open its shops after Christmas until 27 December, to

capitalise Boxing day footfall.

5. i-Phone App: Shopping wherever, whenever.

John Lewis continued its multi-channel approach with the launch of an iPhone app in December 2011,

giving customers access to 200,000 John Lewis products while on the move.

Key features include:

• Locate the nearest John Lewis via the phone's GPS

• Browse the johnlewis.com product catalogue

• Scan the barcodes of products in-store to access additional information

• Check ratings and reviews to help decide on the right product

• Link to the johnlewis.com mobile site via the app to buy products if they are out of stock instore

• View the history of products and videos in order to buy them later

Since launch the app has been downloaded onto 120,000 smartphones and generated £130k of direct

sales.

6. Free WiFi – A first for UK department stores.

November 2011 also saw John Lewis become the first UK department store retailer to offer free Wi-

Fi access to its customers. Accessing product information and viewing ratings and reviews to influence

their purchase, customers are now able to surf all areas of the internet to compare prices, reinforcing John

Lewis's pricing promise to be 'Never Knowingly Undersold'. It gives customers in all areas of John Lewis

shops faster access to www.johnlewis.com and the internet than when using 3G. It also provides access to



the John Lewis mobile site, including My John Lewis and the Wish List which will automatically sync

between a customer's home PC and their mobile in-store.

7. Bringing Partners and e-commerce together - Partner Assisted Customer Transactions PACT.

John Lewis now has over 300 customer self-service Kiosks and over 2,000 Partner assisted terminals

in over 30 of its shops. This allows a customer to browse and buy from the website whilst in-store. It

also allows partners to help customers if they are unfamiliar with the website thus bridging the gap

between offline and online customers.

PACT has been a huge success; sales delivered by the kiosks have increased 572% from 2010 to 2011.

More fundamentally however, 25% of all new online customers in the first half of 2011 were

recruited directly from PACT experiences in-store.

Each shop now has a Digital Champion to help customers to shop online as part of John Lewis's

commitment to Race Online 2012.

8. Aurasma in the brochures and Christmas Ads.

John Lewis has increasingly integrated technology into print campaigns and catalogues to ensure the bridge

between physical and digital worlds is ever smaller. Aurasma “The World’s First Visual Browser, bringing

the physical and virtual worlds together” is an app available on smart phones that allows it to recognise

images, symbols and objects in the real world, connecting the user with exciting online rich online content.

SUMMARY & CONCLUSION

In two short years, (across 2010 and 2011) from being considered a predominantly bricks and mortar

department store, John Lewis has become a leading retailer in its use of e-commerce.

This is a story about how e-commerce has been expertly woven into a traditional and long standing

organization to work with its existing principles and structures to great effect.

John Lewis haven’t simply added new technologies but rather embedded them. The brand’s founding

principle (Never Knowingly Undersold) has been developed to make it apply to a new e-commerce

structure. The brand’s biggest source of differentiation, its Partners, have been seamlessly brought together

with e-commerce initiatives to deliver a combined and assisted shopping experience.

John Lewis is only at the beginning of its e-commerce journey, but it has taken up the charge with real

drive, and the commercial returns have been incredible.

But e-commerce is about more than simply creating the channels and technology to help customers access

John Lewis. It’s also about creating inspiring content that rewards customers when they visit John Lewis

across all channels and cementing brand loyalty amongst new and existing customers for years and

generations to come.



Article 10: John Lewis’ retail warehouse is not sexy but it delivers

James Hall explores six-and-half miles of conveyor belts and cranes that helped John Lewis rack up arecord £48m online sales in two weeks at the start of December.

13 Dec 2010 (extract)

John Lewis's Christmas TV ad is a masterclass in creating that Warm Festive Glow (TM). But if the advertcreates the illusion, what about the other side – the logistics operation that actually delivers the goods tocustomers?

The answer lies 50 miles from London in a 750,000 sq ft warehouse off junction 13 of the M1 near Milton Keynes. It is not warm, it is not festive and the only thing glowing are headlights on the motorway.But it is from this vast warehouse that John Lewis delivers products to its 33 department stores and toshoppers who order goods from its website.

The site – at a place called Magna Park – holds 160,000 different John Lewis products and can dispatchthem off to shops at breakneck speed. Of these products, around 20,000 lines are also available for

shoppers to buy direct off the internet. The web has become a massive sales channel for John Lewis over recent years.

Magna Park is also the epicentre of the chain's so-called "click and collect" strategy. Customers canorder an item online for it to be delivered to their nearest store for picking up. Orders placed by 7pm willarrive at the store of choice by early afternoon the next day, from Aberdeen to Southampton.

Magna Park is semi-automated, meaning that the workload is split between man and machine. Thewarehouse takes in products from 1,000 suppliers, from Panasonic to small cottage industries. Layers and layers of automated conveyor belts carry hundreds of thousands of green "tote" boxes from their shelves toworkers - who take out items to be sent to shoppers or to stores. The belts then take the totes back to their shelves. In total there are 10.5 kilometres of conveyor belts in the warehouse. The aisles are 75 metres longand 15 metres high, and the cranes that locate and pick up the totes travel at six metres a second. JohnLewis calls this an Automated Storage and Receiving System, or ASRS. The Daily Telegraph calls it mind-

boggling.

The cost of the kit was £28m, while the cost of the whole project was £58.5m. That is a big investmentfor a chain that only has 33 shops. The technology is clever. If two or more totes hold the same productthen they are deliberately located in different aisles so that if one aisle breaks down then the product will beavailable elsewhere. It is the same principle as the Monarch and the heir to the throne not travelling on thesame plane together in case it crashes, except it is Middle England's Egyptian cotton sheets and iPods thatare at risk rather than its royalty. At this time of year, such things can be as important to shoppers.

The warehouse opened in June 2009, replacing an existing "manual" one in Stevenage. It was built

with expansion in mind. "We had built it for 10 more department stores and modest online growth.

Instead we are opening fewer stores but are seeing massive online growth," says John Munnelly, the

warehouse's general manager.

The increased efficiency on the old Stevenage warehouse is marked - Magna Park packs seven times more

products than the old place did. Magna Park has 97.5pc availability (retailspeak for the percentage of goodsthat are where they should be) and the software has a 99.5pc success rate. The sprinkler system is soadvanced that "you are more likely to drown than burn" if there is a fire, says Mr Munnelly.

John Lewis expects home delivery orders – and click and collect orders to its stores – to continue at currentlevels right through Christmas. Last year shoppers even placed big volumes of online orders on ChristmasDay, although this being John Lewis there was a lull during the Queen's Speech. Retail warehouses aredeeply unsexy things. But if run well, they can add a Warm Festive Glow of their own to a retailer's salesfigures.



Article 11: M&S strategic problems

Sunday 13 January 2013 (extract)

They say 13 is lucky for some. After a miserable Christmas, Marc Bolland, the embattled chief executive of Marks & Spencer, will need more than luck to get through 2013 with his job intact. The Dutchman's fate

is likely to rest on his performance over the next 12 months when he must bounce back from a

miserable Christmas in clothing while trying to drag the UK's favourite knicker seller into the 21st

century.

Things did not get off to a good start last week when leaked news of M&S's poor festive clothing salesforced him to rush out a financial statement late on Wednesday evening. The incident added fuel torumours that Bolland is facing rebels within his own head office, as well as issues with knitwear and pants.

A string of management changes and restructurings appear to indicate an unhappy ship, with rumours thatBolland tends to micromanage his staff. What's more, the 128-year-old retailer posted an unexpectedly bad 3.8% fall in underlying sales of clothing and homewares, the main factor in a 1.8% fall in overallunderlying sales for the group in the three months to 29 December.

After M&S's turkey of a Christmas, some onlookers are already convinced that Bolland's goose is cooked.Profits are going backwards despite heavy spending on store refits, IT and new warehouses. Beyond thehysteria, however, M&S's share price barely shifted. Food held up, delivering a 0.3% rise in underlyingsales over the period, despite the UK's economic woes.

Bolland fended off a profits warning through cost-cutting, a better-than-expected performance on food, and improved profit margins on clothing, secured by reduced discounts.

His strategy and team are understood to retain the full backing of the group's board, and leadingshareholders also appear prepared to give Bolland more time.

The problems with M&S's core women's clothing ranges were already well recognised before Christmas. Anew clothing team led by M&S lifer John Dixon, fresh from bringing about a revival in the store's food business, and Belinda Earl, former boss of Debenhams and Jaeger, was appointed in July. Their influence

will not be fully apparent until autumn, when the future of Bolland and the business itself is likely to bedecided.

Their challenge is clear on any store visit. M&S has the difficult job of catering to a very wide audience. Itslarge, ungainly stores were mostly acquired well before the internet was even imagined and its vast array of products can be confusing to navigate. Modern shoppers cannot be bothered to wade through this jungle,analysts think. They want to be able to spot ranges chosen specifically for them and presented in a way thathelps them put items together.

M&S has created in-house brands such as Per Una, Limited Collection and Autograph to help with that job.But fashion experts say the problem is more that these brands don't have a clear identity. Their look and target audience appears to change by the year, the season or the whim of the latest buyer in charge.

M&S is also one of the few remaining retailers to present its clothes in categories – collecting

knitwear, trousers or dresses together, creating a scary sea of products. Breaking that old-fashioned

arrangement is not simple. It would involve expensive investment to rearrange stores and meanchanges in the way products are bought, managed and promoted.

Meanwhile, shoppers complain that the delicate balance of quality, price and fashionability has got out of sync.

Jane Kellock, of the fashion blog for fortysomethings The Women's Room, says her peers still love M&S, but want it to stop chasing trends and drop gimmicky details. "We want well-made clothes that take currenttrends into account, but only if they are relevant to our age group," she writes on the blog.

That can only be delivered by tectonic shifts in the way M&S finds and handles its merchandise.

http://www.guardian.co.uk/business/marc-bolland

http://www.guardian.co.uk/business/marksspencer


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Article 12: Debenhams plans 70 new stores

The Guardian, Thursday 18 April 2013

Debenhams, the UK's second biggest department store, has revealed ambitious expansion plans despite suffering its first fall in profits in five years. The group has identified up to 70 high streets and

shopping centres where it hopes to open outlets to add to its current 155 stores.

It also plans to improve its multichannel offering, revealing that shoppers who use its stores and

websites spend more than twice as much as those who shop only in stores or only online.

Chief executive Michael Sharp said the high street was still vitally important for the business and felt itmust expand further to keep up with competition. "We're 200 years old this year yet I would describe our UK store portfolio as immature," he said. "We've got 155 stores in the UK and we've identified there

are up to 70 markets where we don't trade that we could trade profitably even if you accept the fact

that the internet is taking a larger proportion of clothing expenditure."

He suggested that Cribbs Causeway, in Bristol, Bluewater shopping centre in Kent, Kingston upon

Thames and Watford were all areas where they could open. Seventeen new stores are already in the

pipeline, to be opened by 2017, including in Cheshire Oaks, Hereford and Leamington Spa.The plans come as the business saw half-year profits fall 5.4% to £120.3m on sales of £1.28bn, the firstdrop since 2008. First-half profits make up 80% of the year's total for the company because the six monthscover the all-important Christmas trading period and January sales.

Debenhams issued a shock profit warning last month, blaming heavy snow in January for a 10% fall insales in the first two weeks of the month.

Debenhams said online sales had soared 46% to £194.4m for the six months. Online is now 12.7% of total sales, with purchases through smartphones and tablet computers jumping 265%. The profitmargin from online sales also overtook store sales for the first time, the company said.

Sharp said he wanted internet sales in the medium term to top £600m – but that would leave Debenhams along way off bigger rival John Lewis, which revealed earlier this year that sales on its website hit £959m.

Sharp said the drop was due not just to snow but also an increase in store improvements, which he believed was vital to future success. Of the profits fall Sharp said: "The merchandising standards have let us downand have not been good enough. Modernising stores is the way forward. We updated 18 stores in the firsthalf and will modernise 12 more in the second half."

More focus is also being placed on own-brand clothing labels, which now make up 50% of clothes sales, because of the higher margins and greater control over the supply chain.

Other areas of expansion include beauty, the fastest growing area, with 1.5 million customers owningDebenhams beauty cards.

Among the stores being redesigned is the one in Oxford Street, London, which will be turned into a metaland glass-clad building. However, it has come at a cost, with a 10% fall in sales as parts of the store aresealed off.

Internationally, sales grew 1.6% to £280m, with particularly strong sales in Denmark under itsMagasin brand, up 9.8%. However, the company quit its Romanian business, with the closure of six

stores and a writedown of £3.8m.

Sharp said: "Romania was a market we entered in 2007 and with hindsight I wouldn't have entered

Romania in the way that we did. "They were predominately clothing stores and not really a

department store, which is what we are trying to implement."

Sharp said 10 new international stores will be opened this year, mainly in the Middle East.

http://www.guardian.co.uk/theguardian

http://www.guardian.co.uk/business/debenhams


http://www.guardian.co.uk/business/debenhams

http://www.guardian.co.uk/theguardian




Article 13 : How John Lewis weathered the high street storm

2 March 2013 (extract)

Early on Thursday morning workers at John Lewis and Waitrose stores around the country will excitedlyopen neat white envelopes and read out the much anticipated bonus figure to their 87,000 colleagues. Itmay not be on the scale of a bankers’ bonus but with an anticipated pay-out of around £200m between them – about 15pc of each staff members’ annual salary – it will certainly be celebrated. As shop workers inrival stores face an uncertain future, the John Lewis Partnership’s staff will be enjoying the fruits of a raregood news story from the British high street.

Of course, part of the reason John Lewis has been sheltered from the storm raging elsewhere is because itsslightly older and more affluent customers have been relatively insulated from the income squeezeexperienced by others. The downturn has not affected everybody and those who are in secure employmenthave found the cost of their debts falling.

But, the economic background of its customers is not the most important thing driving the John Lewis

phenomenon. Once a fusty old business with the culture and appeal of the civil service, the partnership hasturned itself into an online powerhouse unafraid to try the latest ideas.

The company, which shares a proportion of its profits with staff every year, is investing in the latest onlinetechnology and new concepts such as a drive-through facility for collecting groceries ordered on line aswell as ensuring its department stores look good enough to host up-market beauty brands alongside itstraditional home, electricals and fashion ranges.

At John Lewis, Street is also experimenting with smaller formats, the latest of which was a 65,000sq ft

store in Exeter which is less than half the average 135,000sq ft of its main outlets. It is also building a

closer relationship between its website and the high street stores by allowing shoppers to pick up

goods ordered online at a local department store or, from later this year, via a network of thousands

of convenience stores and garages in the Collect+ network.

Both chains have also been boosted by allowing shoppers to pick up goods ordered at John Lewis’s onlinestore at a local Waitrose. To date, 43pc of John Lewis click-and-collect orders are picked up in a

Waitrose shop.

While Marks & Spencer is still hobbled with a uninspiring website built for it by e-tail giant Amazon

under a deal signed several years ago, John Lewis opted to acquire a small operator, Buy.com, in

2001 and used the company’s knowledge and systems to help tailor John Lewis’s online store exactlyto its shoppers needs. Having enjoyed a 30pc rise in online sales in the past year, it is about to launchanother updated version of the site which will allow better communication with stores and shoppers.

Waitrose, meanwhile, invested in the Ocado home delivery service which launched in 2000. It was a

ground-breaking investment but the contract was structured so that the partnership was able to sell

down its stake in the online business over time and develop its own separate store-based service

alongside.

The supermarket benefited from a jump-start to its online ambitions via its arms-length partner and thenlearned from that experience to mould its own service.

Those developments online underline the real key to the John Lewis Partnership’s success. It understandsits customers and so is able to build its business around their needs and desires according to Richard Hyman, an adviser to the PatelMiller retail consultancy. He says the company engenders great trust inshoppers, partly because of its focus on quality, partly because of its guarantee that it is “never knowinglyundersold”. Its long-term warrantees, advice and reliability also helped it hoover up sales of hi-tech gadgetswhen specialist electrical store Comet went into administration.



While John Lewis has undoubtedly benefited from booming sales of new technology in the past year, particularly tablet computers, it has also seen a dramatic rise in sales of clothing. That is because, whereothers have stumbled, it has worked hard to bring in new interesting brands and develop its own labels fromKin to the highly popular Somerset by Alice Temperley. Those developments have increased John Lewis’sappeal to a younger shopper.

Ironically, M&S decided to move out of selling technology products in 2010, so missing out on the

stellar growth in demand for gadgets which helped draw shoppers into John Lewis last year.

John Lewis ... is not planning any new stores in 2013 but will invest £57m in refurbishing existing

stores including Oxford Street, High Wycombe, Kingston, Surrey, and Nottingham. Next year it will

open a full-line department store in Birmingham with others planned for Ashford, York, Leeds and

Chelmsford in the future.

Its expansion plans are in sharp contrast to rival businesses which are cutting back their store portfolio asthe move online makes a high street presence unprofitable in many areas.

John Lewis is signalling that it is not complacent. It caused a shock earlier this month when it revealed discussions about the removal of 325 department managers at its stores, despite a strong financial performance.

That followed the departure of 700 in-store call-centre employees in 2009, while 300 store jobs

involved in training and supporting colleagues are in discussion. Keeping costs down may be asensible business move but cutting too hard may risk damaging the ethos of the partnership and its

reputation for service.

The race to open more space at both Waitrose and John Lewis may also put their famous customer serviceunder strain.



Article 14 : John Lewis thinks small to beat recession with

compact stores in well-heeled towns

As big new developments become rarer, John Lewis Partnership plans compact stores onaffluent high streets

The Observer, Sunday 14 October 2012 (extract)

"That is a good omen," says John Lewis boss Andy Street, pointing to the small rainbow breaking throughthe grey drizzle obscuring the majesty of Exeter cathedral's imposing Norman towers. The 100 shoppersqueuing around the block to get into the shop are also a good sign for middle Britain's favourite departmentstore, which has just opened in the well-heeled university city.

The compact five-storey John Lewis, at what one person described as the "grotty" end of the highstreet, is a departure from the company's usual sprawling interiors. Like other major chains before therecession, John Lewis relied on new malls and regeneration projects to provide new outlets. But with property investors taking a dim view of our future spending power, many schemes have been mothballed or dropped.

At half the usual size, the "flexible" format means opening in smaller shopping centres makes

financial sense. "We can now consider opening shops in areas that were not always thought feasible

for a traditional John Lewis building," says Street. He sees "at least 10" locations, including York

and Chelmsford, where such stores could work.









Article 15 : Multichannel retail pioneers are thriving, will you?

February 25, 2013 (extract)

With the recent collapse into administration of High Street giants Blockbuster, HMV and Jessops, it’s clear

that many firms are finding it a tough time to be in retail. But unfazed by these failures, and in the face of a

potential triple dip recession, there’s a wave of businesses doing retail differently. At the head of this pack,

John Lewis is even building brand new stores to boost its online sales. It’s doing it by opening ‘bespoke’

stores, outlets that are cleverly tailored to the areas they’re in and which stock products the company knows

will succeed with local shoppers. As MD Andy Street puts it: “We know that new shops stimulate our

brand presence and online sales in areas where we trade.”

The company is bucking the downward retail trend because it has learned from clever multichannel retail. It

uses different channels to gather information on its customers, to interact with them and gather their

feedback. And as it has done so, it has discovered many of its most valuable customers mix-and-match

three different ways of shopping from John Lewis — online, in stores and via mail order.

The intelligence it gathers on its customers buying habits allows it to use a wide spectrum of

communication channels to reach them — and test how well promotions by phone, email, on the web, in-

store or via direct mail resonate with individuals.

Multi-channel marketing goes one-to-one

That allows them to refine their marketing to communicate one-to-one with prospects and customers in the

ways they prefer, with offers they are known to be likely to respond to. What seems so remarkable is that a

retailer of John Lewis’s size and complexity can offer a personally tailored service on a grand scale, with

such skill and success.

Emerging multichannel retail behaviour

PwC has been conducting surveys of online shoppers since 2007, and in its 2011 report Pick ‘n’ Mix:

Meeting the demands of the new multi-channel shopper it detected some significant, emerging retail

developments. These included:

• 20% of customers spending more than half of their disposable income online

• A big increase in impulse shopping, much in response to promotions by email and via social media



• A consolidation of spend with a smaller number of preferred retailers — who offer a seamless

customer experience across the full range of shopping channels (51% of shoppers reported spending

more with favourite retailers since they started shopping across multiple channels)

• Retailers like Abercrombie and Fitch opening flagship stores to show off their wares, even though

most direct sales are via the web

Although customers are shopping in different ways, they use different channels to research and buy

different products. For example, PwC found: …people ideally prefer to research electricals online, buy

them in-store, and receive them at home; with fashion they want to research in-store, purchase in-store,

and receive at home; while with health and beauty, they may not research at all, but buy in-store and take

the products home.

The key to successful multichannel retail is using the data you gather about your customers to understand

how and why they want to use different channels. Ever wondered why retailers like John Lewis and

Debenhams have been opening so many coffee shops in their stores? It’s because shopping in stores has

now become much more of a social occasion – and refreshment is as essential as being able to view the

products in store.

Riding high with multichannel retail

PwC makes four key recommendations for any retailer wanting to ride the crest of multichannel retail.

1. Making it onto a customer’s ‘most favoured’ list — by delivering products, prices, promotions,

service, rewards and delivery via the customer’s preferred channels.

2. Understanding your most valuable customers — and developing a single view of the product, as wellas the customer, to satisfy demand

3. Building deeper relationships with loyal shoppers — particularly by engaging them via social media

4. New performance measures — to help you evaluate in the right way, such as a store’s effectiveness as

a showroom rather than just as a space for making transactions.

Multichannel business management systems

However, there’s one thing that all successful multichannel businesses have in common, and that’s the right

business management systems for multichannel retail. These systems allow you to offer products

seamlessly to any channel, gather intelligence on customer buying behaviour and refine your business

model to provide the right products, in the right channels, promoted to the right people in the right way at

the right time. Or to quote PwC one final time: …you need to make your online and in-store capabilities

part of one integrated and seamless operation (which includes your telephone, mobile, TV and catalogue

sales if you have them) so that customers can choose where they research, where they purchase, where they

receive and return their goods, and where they get their after-sales support.



Article 16 : M&S digital ‘eBoutique’ concept

Published: May 2013

M&S have opened their first store in Holland in the popular Kalverstraat district in Amsterdam. Within thestore, customers can buy food but also explore the full range of clothing products on tabletops in the storeand on digital screens.

A 9 panel videowall displays content using a new digital signage software solution, there is also digitalsignage on columns showcasing the latest fashion for the season in the form of catwalk videos. The stylishtouch screen order points allow customers to browse the full catalogue and order for delivery to store or home. Staff are also on hand to assist customers through assisted ordering with iPads. The biggestinnovation is the ‘virtual rail’ which allows customers to browse the life sized imagery of the hottestdresses and troussers on a 3 x 46″ touchscreen which imitates a real life clothing rail.

We’re extremely happy to be coming back to Holland in response to huge customer demand. We’re coming back in a new way because Holland is one of the most internet savvy countries in Europe,” said CEO MarcBolland.

“We are therefore launching our new website – www.marksandspencer.nl – and a brand new e-Boutique asa first step towards rolling out a number of stores in the Netherlands.”



http://retail-innovation.com/wp-content/uploads/2013/04/mns-amsterdam2.jpg





Article 17 : M&S returns to the Netherlands with a ‘click &

bricks’ strategy

corporate website (extract) 16 April 2013

British retailer, Marks & Spencer (M&S) today announces that it will return to the Netherlands with acombined e-commerce and stores ‘clicks & bricks' strategy, in line with its ongoing business plan to become a leading international, multi-channel retailer.

The move replicates M&S's successful return to France in 2011 with a ‘clicks & bricks' strategy which willalso see three new full-line stores open in Paris this financial year. Following the launch of its dedicated

Belgian website in November 2012, M&S also plans to open a flagship store at Toison D'Or, Brussels

in 2015. Additionally, M&S is today launching a dedicated website for customers in Luxemburg.

The approach will see M&S offer the very latest in online and offline shopping experiences to customersacross the Netherlands. M&S's strategy for the Netherlands comprises:

• A brand new Dutch website serving customers right across the country – in Dutch, priced in Euros and with local delivery and payment options;

• A complementary mobile optimised site that also launches tomorrow;

• A world class multi-channel M&S store located on the Kalverstraat in the heart of Amsterdam'sshopping district. Showcasing the future of retail with cutting-edge world first technology to improveand enhance the customer experience, the store will open at 11:30am tomorrow morning. AlongsideM&S's outstanding quality food, customers will be able to browse and buy the latest London style fromM&S's new E-boutique which features a truly unique Virtual Rail;

• A new agreement with BP to open six M&S Simply Food pilots at BP forecourts at key locations inRandstad – with the first store opening in Utrecht in September 2013;

•

The opening of two full-line M&S stores at De Markies in The Hague in spring 2014 and a flagshipstore at The Rokin in Amsterdam by autumn 2015 – offering a full clothing, homeware & food offer.

Speaking from Amsterdam, Marc Bolland, Chief Executive of Marks & Spencer, said: “We're extremelyhappy to be coming back to Holland in response to huge customer demand. We're coming back in a newway because Holland is one of the most internet savvy countries in Europe. We are therefore launching our new website – http://www.marksandspencer.nl/ – and a brand new e-Boutique as a first step towards rollingout a number of stores in the Netherlands.”

Full multi-channel offer

M&S's ‘clicks & bricks' strategy for the Netherlands is truly multi-channel, combining online and in-storeshopping, in response to the changing way that consumers shop today.

Dutch website and mobile optimised site

Underpinning the multi-channel offer is its new localised website and new mobile optimised site – inDutch, priced in Euros and providing opportunities to serve customers across the whole country.

M&S's international delivery service, which sees products delivered to around 80 countries via its UK website, has proven that there is a high demand from customers for M&S products in the Netherlandswhich is one of the top performing markets. The new online and mobile sites will enhance the customer experience and help to build M&S's presence.



With local payment and delivery options, http://www.marksandspencer.nl/, will provide customersthroughout the Netherlands with access to an extensive range of over 15,000 stylish, high quality M&S products across womenswear, lingerie, menswear and kidswear, as well as a selection of homeware.

M&S Kalverstraat

M&S will also open a brand new concept store featuring its latest cutting-edge digital innovations at 226Kalverstraat tomorrow. The new 500 square metre store creates a unique and inspiring shoppingenvironment, where customers can ‘shop to order' via the world's first Virtual Rail which seamlesslyintegrates digital rails with physical rails of clothing samples. Customers can place orders for free todelivery to the store through: in-store order points; dedicated style advisors equipped with iPads; by mobileusing the store's free wifi; or online using on their own computers.

Customers can also ‘shop to go' that day. The store offers a specially chosen edit of the latest womenswear trends, selected with the style loving, fashion focussed Amsterdam customer in mind.

The store boasts a convenience range of 1,400 high quality, innovative food lines including sandwiches,salads, wines as well as some of the most popular M&S chilled prepared meals and groceries including EarlGrey tea and crumpets.

Laura Wade-Gery, Executive Director E-commerce Multi-channel at Marks & Spencer said: “The E- boutique that we are launching tomorrow demonstrates just that – it's innovative, aspirational and allows us

to offer our latest fashion collections from a much smaller footprint. It also complements our new weband mobile sites to bring a truly unique retail experience to the M&S customer here in the Netherlands.”

Store presence

In line with M&S's international strategy the retailer is applying a mixed ownership model as it builds its presence across the Netherlands.

M&S Simply Food pilots at BP forecourts

This September will see the opening of M&S's first international M&S Simply Food pilot at a BP forecourtin Utrecht. This will be followed by the roll out of a further five pilots at key locations in and around Amsterdam, The Hague and Utrecht by November 2013 with the potential for further expansion intoadditional BP forecourts in the future.

The new stores will offer customers convenient access to a range of up to 700 high quality, innovative

M&S fresh food products, including ready meals, fresh produce, sandwiches, flowers and basic groceries.

Hendrik Muilerman, Managing Director of BP Netherlands, said: “Marks & Spencer is a quality food retailer with an outstanding reputation for fresh and speciality products. With the M&S Simply Food pilotsat our forecourts, we positively distinguish ourselves on the Dutch retail market. BP offers an extensiveassortment of convenience products and fresh food at highly accessible sites for customers on the road and at home, at easily accessible locations with convenient opening hours. This approach forms part of BP'sEuropean retail strategy, in which our forecourts fulfill an important role for daily convenience for our customers.”

The new agreement is part of M&S's plans to open franchise M&S Simply Food stores in Western Europeand builds on the successful UK partnership between M&S and BP which launched in 2005. There are nowover 160 M&S Simply Food stores at BP forecourts throughout the UK which M&S and BP will continueto strengthen and grow over the next few years.

Full-line stores

M&S has also unveiled plans to open two full-line stores in the Netherlands which will showcase the very best that M&S has to offer over the next couple of years. Customers will be able to shop M&S's extensiveoffer of stylish fashions for the whole family, as well as home products. Each store will also feature M&S'sunrivalled Foodhall, with a wide range of its popular quality food products, as well as an in-store bakeryand M&S Café.

The new stores in the Netherlands will complement M&S' growing international store presence, with over

410 stores in 48 territories across Europe, Asia and the Middle East.



Article 18: Plan A integral to the rebirth of Marks and

Spencer, says CEO

7 July 2013 (extract)

Marks & Spencer's "Plan A" green strategy was so-named because there was no Plan B, accordingto the retailer's then chief executive, Stuart Rose, in 2007. The current boss, Marc Bolland, must now persuade anxious shareholders that the company should not change its approach, or its leader.

Bolland faces a tough reception at the company's annual general meeting on Tuesday. Investors who gather at Wembley Stadium are expected to hear that fashion sales declined for the eighth quarter in a row.

He views the Plan A social and environmental plan, with its emphasis on cutting waste, saving energy,trading fairly and animal welfare, as integral to the rebirth of M&S. Ask him if he'll still be seeing itthrough in a year's time and the tone turns from green to red. The former Morrisons boss does not concealhis irritation, and points to recent public backing from chairman Robert Swannell, despite presiding over two successive years of declining profits.

Ask him if he thinks he's the got the right strategy for M&S – the crucial autumn/winter clothes collectionis said to have impressed investors — and Bolland is adamant: "I've been confident from day one and nowI'm very confident in the strategy. In the long-term, for this company to stay in the hearts and minds of customers, shareholders and all stakeholders, the brand needs to be built around trust and Plan A

builds strongly around trust."

Analysts predict that M&S will report that fashion and homeware sales fell by 1.5%, on a like-for-like basis, in the last three months. That could fuel criticism of the company's performance, with lingeriedirector Janie Schaffer having quit after just three months in April.

According to Bolland, long-term investors are interested in a sustainable business fuelled by the

values behind Plan A. Shoppers, assailed in recent months by headlines over the source of their

products, like the idea that they don't have to worry if their strawberries are ethically sourced or

that workers are treated well in factories supplying M&S.

Those issues of food and labour sourcing have had a major impact on the news headlines this year. M&S,

however, was untouched by the horsemeat scandal that hit Tesco among others, and also had no links

to the Rana Plaza factory in Bangladesh where more than 1,000 workers died in April when the

building collapsed. Primark was among the clothing brands that had to defend their manufacturing

strategies after the tragedy when it emerged that dozens of western retailers used the Dhaka

complex. Twenty UK retailers, including M&S, attended a government summit last week to discuss

how to prevent a repeat of the disaster.

Bolland suggests that M&S has avoided these disasters because of the strong sourcing policies of Plan

A, which was billed as costing £200m over five years when it launched in January 2007 with typical

Rose razzmatazz, but has since saved the company £320m.

He says M&S's food business has been doing well recently partly because shoppers trust the way theretailer sources food compared to rivals who discovered there was horsemeat in their beef products, and that those ethical values can also play a part in turning clothing sales around.

"Plan A has given an additional strength and trust in our business and brands and helped us improve and protect the provenance of our sourcing," he says.With that in mind, Bolland insists that the Plan A targetsare not negotiable, despite tough economic times in which some shoppers give social and environmentalissues a lower priority. "In the economic times of today, interest in sustainability is under pressure and itshouldn't be because it is more critical now," Bolland says.His response to shoppers' changing priorities ismore customer and community engagement.



http://corporate.marksandspencer.com/investors/shareholder/agm_info/agm_archive

http://www.guardian.co.uk/business/2013/apr/16/marks-spender-lingerie-director-resigns


http://www.guardian.co.uk/business/2013/jul/03/government-retailers-factory-disaster-bangladesh


http://www.guardian.co.uk/business/2007/jan/15/marksspencer.retail









http://corporate.marksandspencer.com/investors/shareholder/agm_info/agm_archive






Article 19: M&S shakes up supplier base

M&S shakes up supplier base as part of turnaround efforts

15 May 2013 (extract)

Marks & Spencer is set to shake up its supplier base as part of plans to turn around its fortunes in women'swear through a focus on quality and style.

Speaking at the launch of the retailer's highly anticipated autumn/winter collection last night (14 May) - thefirst to be delivered by the company's new general merchandise management team - new style director

Belinda Earl said it would fund improvements in quality through leveraging its scale. The moves will

see the company reduce the number of suppliers it uses by 10%.

Speaking on the sidelines of the event, sourcing director Krishan Hundal told just-style that the companyneeds to "focus scale better" and is reviewing its total purchasing power and international scale.

The moves are just one aspect of how the company is working to improve its general merchandiseoperations, after revealing last week that it was reducing the number of distribution centres it operates.

Earl said the M&S brand has the potential to be "more resonant" with consumers after recording fallingsales for the past few quarters. In particular, the company is focusing on "reasserting its leadership inquality through significant upgrades," she explained.

Innovation is a key part of these upgrades, including investments in technology that improves the longevityof garments. All cotton T-shirts, for example, have been upgraded to feature a Staynew finish, whichreduces piling; coats and jackets feature Ascolite button technology, which prevents buttons from fallingoff; and Insolia technology has been extended across footwear ranges to reduce pressure on the foot and

improve comfort and stability.

Highlighting the importance of its women's wear collection, which has launguished for a number of seasons, general merchandise director John Dixon described the range as the "golden key to the goldendoor". Getting women's wear right means a halo effect for everything else, he said.

M&S is hoping to draw consumers who shop its lingerie and food ranges into women's wear too, Dixonsaid. He emphasised the company's focus on an older consumer, saying that 54% of sales come fromshoppers aged 55 years and older - a demographic that is set to account for 65% of growth in the UK.

Earl added that the retailer needs to "take the lead" and be more forward-thinking, as well as telling thestory of its clothes, explaining the benefits of its Plan A programme, its design benefits and quality.

Other changes include improved differentiation between its sub-brands. M&S Woman, its core collectionwill become M&S Collection, while Limited Collection, its fast fashion range will be rebranded as Limited

Edition, and form part of M&S Collection.

Its Classic collection, aimed at older customers, will also become part of M&S Collection, but retain its brand identity. The moves will also see the company reduce the number of product lines by 10%

allowing it to buy more deeply in key categories such as dresses, coats, knitwear and formal tops.

Speaking about the drivers behind the reduced range, women's wear director Frances Russell explained that in one product category, the company was generating 90% of sales from 50% of products.



Article 20: M&S to modernize sourcing and supply chain

9 May 2013 (extract)

The retailer Marks and Spencer is working to update its sourcing and logistics systems after admitting that20 years of underinvestment have led to a sluggish and inconsistent supply chain. Speaking yesterdayFinancial Director Alan Stewart told investors at a tour of the firm’s new state of the art distribution

centre at Castle Donington in the UK that its supply chain is “an area where M&S is being challenged asit has not necessarily been the best in class”.

The company has prioritised the revamp of its supply chain and sourcing systems as it works to becomean increasingly online and international retailer. Plans involve streamlining the number of distributioncentres it operates as well as moving to an FOB model (BPP note: where M&S transports, stores and delivers the goods to stores) from a full service vendor model (BPP note: Full service vendors (FSVs)

transport, store and deliver goods for M&S; FSVs currently account for 43 per cent of the retailer’sclothing and home supply base by 2015, M&S aims to have a supply base comprising 35 per cent FSVsuppliers and 65% FOB).

Sourcing head, Krishan Hundal, said this shift will reduce the level of complexity across the business withone buying and sourcing model allowing for better visibility across the supply chain, while also improvingmargins.

Work is well underway on the project with 75% of products and 95% of suppliers to convert to this model by the end of the financial year. He said that these will improve the intake margin by £45m per year.

The company is also changed her resources its ranges with the three strategies for different products – core,seasonal and fast track.

Core products, which accounts for 30% of its range includes body lines underwear and cashmere. Hundalsaid M&S has reduced the price of its women’s cash sweaters to £65.00 from £69.00 last year, whileincreasing the weight and adding extra detailing. He said the company manage to do this by “pulling our scale together and moving production to more cost effective regions”.

Seasonal ranges accounts for 60% of its offer and include products like swimwear. The company is nowtrying some of these items on line before being rolled out more broadly. Hundal said the company moved production of its dressing gowns to Turkey from Sri Lanka which improved speed to market, allowing it totest 22 different colours before choosing to sell the best performing ones. This increased sales by 11 per cent and reduce mark downs by over one million pounds for that line. “It’s about having great in seasonavailability mitigating and taking out the risk of some of our seasonal product” said Hundal.

Meanwhile the company will work to fast track its Limited range, accelerating the time from design to shopfloor, which currently takes 6 to 8 weeks. Hundal said that improving the speed to market on these lines isdependent on logistics and the company’s ability to be agile and flexible, and that the systems overhaul will

help to make the company more responsive.

The changes also mean that the distribution system will become increasingly agile with the companyreducing lead times, inventory and costs through reducing the number of distribution centres. Currently product is stored at over 100 sites across the UK and the aim is to reduce this to three sites.

This shift away from FSV will see the retailer having all its products arrive at its regional distributioncentre which it plans to build by a port in the South East. Products destined for the North will then beshifted to its base in Bradford while other products will go to the Castle Donington site.



Currently there is a 2 to 3 week lead time from port to store, the company hopes to reduce the time to oneday.

The reduction in lead times will also mean the company can reducing inventory by 33% and logistics costswill fall 40%.

The company unveiled its plans of the opening of its Castle Donington distribution centre. The 900,000square foot highly automated site will be able to process a million items each day. It will handle all onlineorders.

Article 21 : Debenhams says can pay dividend and do deals

Debenhams says can pay dividend and do dealsThu, Oct 21 2010 (extract)

Debenhams, Britain's number two department store group, said a plan to reinstate its dividend in 2011 did not mean acquisitions were off the table as the firm posted an expected 21 percent rise in full-year profit.The retailer, which trades from 167 stores in Britain, Ireland and Denmark, and 60 franchised outlets in 23countries, said on Thursday it expected to resume dividend payments in April.

"Because we pay a dividend doesn't rule out (acquisitions) ... We still would have firepower if we wanted to look at other things. The free cash flow is incredibly strong," Chief Executive Rob Templeman told reporters.

The company's debt of 517 million pounds was down at less than 1.8 times net debt to EBITDA (earnings before interest, tax, depreciation and amortisation), he said, adding the company was generating cash,investing 130 million pounds in capex and would still have strong cash flow.

Last year, Debenhams purchased Danish department stores firm Magasin du Nord for 12.3 millionpounds and Templeman has said he was keen to do more deals in western Europe, with further

purchases in other Nordic areas most likely.

Templeman said some shareholders were keen on a dividend payout while others wanted the firm tofocus on acquisitions. "If we can do both that would please everybody," he said.

Debenhams shares, which returned to the stock market at 195 pence in 2006 after 2-1/2 years in privateequity hands, have increased by over a quarter over the last three months, outperforming an 8 percent risein the general retailers index.



Article 22 : John Lewis ‘abusing’ supply chain with rebate

demand

11 March 2013 (extract)

The department store chain John Lewis - praised by the Government as a model British business – has beenaccused of “abusing” its supply chain by demanding a rebate from suppliers enjoying an increase in sales.

In a letter seen by The Telegraph, John Lewis said suppliers will now be subject to a rebate of up to 5.25pcon annual sales with the retailer because it needs “all parties to participate in showing their ongoingcommitment and support”.

The Forum of Private Business said the scheme was “outrageous” and accused John Lewis, which is

owned by its employees, of being a “bully”.

Last week, the John Lewis Partnership reported a 16pc increase in pre-tax profits to £410m and paid out a bonus of more than £200m to its employees. The Partnership also owns upmarket supermarket Waitrose.

In the letter to suppliers, John Lewis said its “exceptional” sales performance is due to investment in newstores, refurbishments, and its growing ecommerce operations.

“By providing this platform for growth, our suppliers have in turn benefited from increased profits levelsthrough efficiencies provided from the increase in volumes,” the retailer said. “It is therefore essential thatthe collaboration shown to date is continued and that John Lewis and its suppliers share the benefit created from these significant growth opportunities.”

The “growth rebate” scheme, which takes effect from the start of last month, ranges from a 0.75pc

reduction on the value of a suppliers’ annual invoice with John Lewis if their sales grow by between

5pc and 9.9pc, to a 5.25pc rebate if sales grow by more than 50pc.

A spokesman for the FPB said: “What a way to treat your suppliers, who are effectively having their pockets picked by John Lewis on the back of strong trading. It’s a win-win for John Lewis all the way.

“This isn’t an either/or situation for suppliers – it’s put up and shut up. This really is a case of John Lewisthe bully.”

On Monday night, John Lewis said it had written to a “small number of suppliers”, thought to be around 130, to “discuss bringing their commercial agreements in line with the rest of our supply base”.

The discovery of the John Lewis letter, which was sent on February 22, comes after Debenhams

informed some suppliers that it intends to cut prices by 2pc and delay payments from 90 days to 120

days.

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