Financial Troubles: Marks And Spencer

Financial Troubles: Marks And Spencer

Marks &Spencer are one of Britain s largest high street retailers, they sell

various good and services, some of these include: Clothes, Food , Furniture, and Loans They were at one stage Britain s largest retail outlet; they usually

have at least 1 store in every town if not more. However the group

has been facing their worst times ever. The problems began at the start of 1999. The problems to date so far include, their

profits halved, they have lost some of their best directors, they are nearing

to financial ruin, and yesterday they reported the sharpest profits decline in

its history. These recent events have caused damage to Marks &Spencer s

market, profitability and organisation. Market: Marks &Spencer have lost

their summer season income due to poor timing, last years summer collections

did not reach the stores until late august by when it was too late. This meant

that customers had to go elsewhere to find the products that they needed. Then

again the same problem occurred with the winter products, which hit the stores

in late November by which it was to late, once again. This means that Marks

and Spencer s lost a huge market share due to poor timing, and this has cost

them dearly

Other factors also affect the consumer, some of these include:

• Marks &Spencer do not take credit cards this means that some customers would

find it inconvenient to shop with them. • Marks &Spencer tend to be quite

expensive in comparison to other retailers in the same field. • Mars &Spencer

do not sell any clothes other that the St Michaels label and these may be of a

fashionable nature however the brand may not appeal to younger generations nor

the designer label conscious. Profitability: Marks &Spencer have not been able

to make high profits due to: • Bad timing over the past year • Lack of variety

in their clothing departments (labels) • Over pricing of products thereby

loosing the competitive edge to other firms. Organisation: As I have

established earlier, Marks &Spencer have had poor timing, this has been highly

due to poor management. The M structure has been described as autocratic and

uncertain. Recently their board of directors have been coming and going which

has lead to poor communication, which in turn has cost the greatly. They have

recently elected a new chief executive, Peter Salsbury. When Salsbury was

elected chief executive investors expected him to produce a quick fix to all

of M s problems. However this has not been the case, since then the group has

under gone huge 3 day long conferences and produced a 700-page strategy