A substantial drop in profits and a desire to turn the company into a modern, customer-facing business have nudged Marks & Spencer into e-commerce.
Its website – which started as a pilot project before Christmas – is to be improved, with simpler navigation and a better range of products on offer. Around 1,200 products will be on offer online by the end of May, rising to 3000 by Christmas time. Soon customers will be able to order from a web site in-store, and make contact through new mobile and static devices such as WAP and DiTV.
Chairman Luc Vandevelde slashed the company's final dividend for the first time in its history and axed three executive directors from the board. He said that the company was going through a period of significant change. “We are being transformed from a traditional retailer into a multi-channel retailer with unique customer understanding.”
The new board will be as follows:
Luc Vandevelde, chairman
Peter Salsbury, chief executive
Robert Colvill executive director, Finance and Financial Services
Clara Freeman, executive director, Group Personnel and UK Selling
Guy McCracken, executive director, International Retail, and Business Systems and Information Technology
Alan McWalter, executive director, Marketing, M&S Direct and e-commerce
Preliminary results for the financial year ending 31 March 2000 showed sales of £8.2 billion (last year: £8.2 billion); £557.2 million profit before tax and exceptional items (last year: £628.4 million).
Commenting on these results, Peter Salsbury, chief executive, said: “Last year I said we needed to reshape our business. Twelve months on there are few people within this organization whose jobs have not changed. We have radically refocused the company towards our customers, who are noticing a difference in our stores and products. We have slowed the sales decline and current trading continues to improve.
“I am confident that the changes we have made to reposition Marks & Spencer as a modern, customer-facing business will achieve a sustainable recovery.”
Luc Vandevelde said: “I took on the role of chairman at the end of February this year. After three months in the job, I am convinced that M&S will have a future as successful as its past.
“We are building the capabilities to satisfy customers needs across a wider range of goods and services, first in the UK as we recover, then internationally. We have embarked upon a profound transformation that will take time and require difficult but necessary decisions.
“I would ask shareholders to accept our current financial performance and recognize that this affects our dividend payout. I am not ignoring the past but we need to be realistic about today.”