Building on our progress
We have come to the end of our three year programme to modernise M&S. It has been a period of profound and transformational change in the business. We must now build on the foundations that we have laid.
In clothing, we will continue to drive the improvements in our ranges, with a focus on quality and style. Looking ahead, we will increase levels of newness and availability down the chain, while making sure that our ranges are appropriate to our customers’ needs. We believe that we can improve GM margins. Changes to our sourcing operations will see us significantly increase the amount of direct sourcing that we do, particularly in Asia. We will also increase the amount of fabric we obtain through our Open-to-Buy initiative. Some of our ranges still need to be refreshed. We are working to address this. We must also do more to make our core 55-year-old customers feel at home when they shop with us, while still appealing to customers of all ages.
Food, International and M&S.com
We will continue to grow our Food business by opening 150 new UK M&S Simply Food stores over the next three years. We will keep investing in innovation, quality and newness to ensure that – as a specialist – we offer our customers exciting, great value products. Through supply chain efficiencies, we will work to improve our margins.
There remain significant growth opportunities overseas, where we see the potential for 250 new stores in the
next three years. Expansion will continue in our priority markets and we will increase our franchise operations, as we believe that this is a low-capital but high-impact way of expanding. Where possible, we will also expand our Food offer overseas, particularly in Western Europe.
In M&S.com, we now have a flexible and modern web infrastructure that is fit for the future. We believe that M&S.com will be at least as profitable as our store channel. We now have the right skillsand culture in place to drive continual innovation in our online activities.
Now that our period of significant investment is over, our capex will fall over the coming years. We will continue to manage the company prudently and will look to reduce costs where we can. We are working to deliver a progressive improvement in margin over the coming years and we are committed to improving our free cash flow position.
We have exciting years ahead of us; our transformation is largely complete, we are fit for the future and focused on delivery.