Whenever I look at the fortunes and travails of Marks and Spencer, I am constantly reminded of that old Chinese concept of yin and yang. Based on the Chinese philosophy and religion of Taoism and Daoism, it posits the view that forces which appear to be opposing or contradictory, such as day and night or winter and summer are actually interconnected and interdependent. Such forces are complementary rather than sources of conflict. In other words, shadow cannot exist without light.

All very philosophical, you might say. What relevance does this esoteric concept have for a retailer such as Marks and Spencer?

You might argue that the clothing part of its business represents the “dark swirl (yin). Whereas the food element projects the yang (brightness, passion and growth). It is arguable however, as to whether they complement each other. In my view, both aspects of the business possibly create more problems than solutions. Should they remain in clothing? Should they divest away from clothing and focus only on food? Should they close down?

In previous blogs, I accused M&S of falling into the trap of becoming increasingly irrelevant to shoppers. I argued that over the past fifteen years or so, it has lost its way in the “fashion / clothing sector and has been relatively successful in food.

Despite changes in the CEO position and within senior management over the past decade, it has failed to recover its former position in clothing and has begun to lose its previously hard won success in food to a range of operators such as Gregg’s, Just Eat, Uber and Deliveroo

To be fair, it has tried to alter this decline, particularly in clothing. This included the use of Holly Willoughby: a well-known presenter of a daytime TV show, largely watched by older women. The actor, Helen Mirren has also endorsed their ranges of clothing.

In my view, such initiatives only serve to accentuate the increasing irrelevance of M&S. Whom precisely are they targeting? They appear to address the older, mainly female demographic. They also target younger female shoppers. Is this not a contradiction in terms? To quote a well-used phrase. If you were a female between the ages of eighteen to twenty-five, would want to shop at a place that is used by your mother or grandmother? The answer is most probably “no”!

My concern is that this issue of positioning and targeting has been a perennial problem for the past two decades. Yet, M&S has failed to grasp the long-term significance of failing to put in place a coherent strategy.

2019 did not bring any improvement in the competitive position of M7S.

In December, it announced the planned closure of around twenty of its larger stores, including the iconic 100,000 square foot Marble Arch store in central London. Interestingly many of these stores contain four to five storeys. This creates possibilities for renting the space for residential and / or office purposes. Are we to interpret this to mean that M&S will enter the property development / real estate market?

In January 2020, M&S posted improved Christmas results when compared to the previous year. However overall revenue from the UK market fell by 0.6 per cent, to £2.8 billion. Food sales rose by around 1.5 per cent.  When we drill more fully into these figures, it becomes apparent that shoppers responded to the range of promotions and lower prices in the food category. While sales may have edged upwards slightly, overall margin from this sector fell.

Revenue from international business increased by 2.3 per cent.

Also in January, M&S launched an athleisure range, aimed primarily at the younger, female shopper. Labelled as “goodmove”, the range consists of around 150 pieces, mainly in the “leggings” category. Optimistically, you could argue that this is a sensible move, as the athleisure segment has grown exponentially over the past decade – mainly driven by sports retailers such as Sports Direct. You could equally argue that this is a very late response to this sector. It also does not directly address the problem of its lack of identity with the younger female shopper (18-25).

Some commentators tale the view that too many of its stores are cluttered up with many unfashionable items that struggle to appeal to even the older female segment.

As alluded to earlier, the food area, while increasing its sales, has compromised by lowering prices and engaging in promotions such as “Dine in for £10”.

On a wider scale, the online area of the business significantly lags behind other retailers. It requires major work in the area of IT development.

On a more positive not, it entered into a deal with Ocado – one of the most successful online retailers in September 2019. M&S acquired a fifty per cent stake in the company. This means that Ocado will stock M&S products by September 2020. This is dependent on the permission of Waitrose, who currently holds a contract with Ocado.

While this can be interpreted as a potentially wise move, there is no doubt that the food sector, particularly the delivery component, has generated fierce competition from such unlikely players as the supermarkets and Amazon.

We have noted that M&S has entered the “discounted price and promotions” element of the market. Does this potentially threaten its former image of being a quality retailer in both clothing and food?

The move to reduce the number of its larger store would appear to make sense. A cursory look at its plans for the future suggests that M&S will rely more on the shift from big stores to the weekly food shop.

It already operates a range of “Simply Food” convenience stores. Perhaps this area might generate greater profitability going forward. At present, the Simply Food stores make up 729 of the overall 1045 stores. The remaining stores (314) sell both food and clothing / home products.

It has also lost its place in the FTSE top 100 companies in the UK. This highlights the increasing danger of slipping even further into the “nonentity” category.

The last decade in particular witnessed the ever-increasing power and presence of retailers such as Primark and the fast fashion development. In my view, the rise of fast fashion retailers has dramatically changed the landscape of fashion retailing. This is in sharp contrast to the 1970’s, 80’s and 90’s, when M&S was seen as the”darling” of UK retailing. My abiding image of that time was its approach to management. Virtually all of its Directors and senior managers were white, male, ex public school and conservative, both in terms of their views and in their dress. Women were an extinct species within this environment.

While things have changed somewhat over the intervening decades, the suspicion remains that M&S has systemically failed in clothing and that it will never capture the younger female segment.

Perhaps it should focus instead on the over forty –five market. After all, this is a growing demographic. It also recognises that you cannot be “all things to all people”.

In the food category it has shown evidence that it can create innovative ranges of food. Whether they can continue in this vein in the future is problematic. Perhaps a focus on the vegan segment and sustainable food may create an opening.

I have a sense of foreboding about the future prospects of Marks and Spencer. Let us monitor their progress over the next couple of years.