In September 2019, as Marks & Spencerfell out of the FTSE 100 for the first time, its then chief executive, Steve Rowe, described the retailer as having a “reputation for frumpiness”. Just six years later, thanks to clever campaigns, unexpected collaborations and a focus on catwalk-influenced pieces, the retailer has transformed itself into the go-to fashion destination for high street shoppers.
Annual results,released on Wednesday, showed a 22% rise in pre-tax profits in the year to 30 March. Overall sales were up 6% to £13.9bn with fashion and homeware increasing 3.5% to £4.2bn.
However, there are now concerns that a recent cyber-attack could derail its fashion strategy. Since Easter weekend, customers have been unable to shop for M&S clothing online. The company’s CEO, Stuart Machin, described in-store clothing sales as “softer than we would like”. The disruption, which is expected to continue until July, could lead to £300m in lost profits, two-thirds of which is pegged to lost clothing sales.
Pippa Stephens, a senior apparel analyst at GlobalData, described the retailer’s upward trajectory as “under threat” with a long-lasting impact beyond declining profits. “The stealing of customer data during the cyber-attack could undermine its hard-won gains in brand reputation and customer loyalty,” Stephens said.
Strong clothing sales figures have been driven by wardrobe basics such as underwear (more than half of women in the UK wear a bra from M&S) alongside more fashion-forward categories such as partywear.
The retailer’s director of womenswear, Maddy Evans, who joined the brand in 2019, has been instrumental in its turnaround. She previously spent 20 years at Topshop under the stewardship ofJane Shepherdson, who was once described as the most influential person in high street fashion.
Since joining M&S, Evans has pivoted the brand towards a more fashion-focused 35- to 50-year-old age demographic. Shoppers can still find skinny jeans, but next to them are more contemporary cuts such as carrot and horseshoe shapes. The retailer sells 10 pairs of jeans every minute.
Its latest holiday edit features classic linen separates alongside sparkly mesh dresses designed to be worn over a variety of swimwear styles, from one-pieces to bandeau bikinis. It also introduced standalone brands such as Nobody’s Child and Jaeger, which M&Sbought out of administration in 2021.
There have also been unexpected designer collaborations. After joining forces withSienna Milleron a sell-out collection of broderie anglaise blouses and slinky trouser suits, M&S enlisted the British knitwear designer Bella Freud to create a capsule collection riffing on her signature slogan crew necks.It sold outin 24 hours. In March the retailer persuaded the luxury loungewear designer Olivia von Halle to createa £55 take on her three-figurepyjamas.
Evans has also reduced M&S’s design time to market, meaning it can react more quickly to catwalk trends. The retailerr has developed a knack for high-quality dupes – cheaper versions of high-end products. In January, a pair of £55 suede loafers similar to a £770 pair from Saint Laurent repeatedly sold out. A £45 pair of leopard-print jeans amassed a 12,000-strong waiting list.Padded bum shortswere quickly followed by a bra with built-in shoulder pads, an idea that came directly from the model Rosie Huntington-Whiteley, who launched her bestselling lingerie line with the brand in 2012.
Sign up toBusiness Today
Get set for the working day – we'll point you to all the business news and analysis you need every morning
after newsletter promotion
Now, a red bubble skirt and square-toed flat shoes are experiencing similar viral success. However, therein lies the catch. Virality stems from the internet. If a shopper cannot easily click to buy as M&S grapples with the hack, they could be dissuaded from buying at all.
Many M&S customers have taken to the brand’s social media fashion account (which has 500,000 followers) to vent their frustrations. Shoppers point out they are left without a local option after the retailer closed several stores. Smaller outlets also do not offer the same range of product or sizes as those found in bigger stores typically in city centres.
Jonathan Pritchard, a retail analyst at Peel Hunt, said the cyber-attack would force loyal customers to try other brands they can easily access online. “There’s a chance that some of the momentum that M&S has built is lost as a consequence,” he said. He described the impact of the cyber-attack on the retailer’s strategy as “a bump in the road, yes, but not derailed”.