The 136-year-old company was founded by Michael Marks and Thomas Spencer in 1884 and soon became a UK favourite for selling high-quality British-made products under its ‘St Michael’ brand. In 1998, M&S became the first British retailer to make a pre-tax profit of over £1billion, but a year later those profits were halved – forcing the company to make unprecedented changes – like switching to overseas suppliers. Since then, bosses have moved to implement a “radical” plan focusing more on the food side of the business as clothing sales plunged 75 percent in recent reports.
But clothing expert Niki Tait revealed in an analysis of the situation at the time how the move hit the British textile industry hard.
Writing for Just-Style in 2000, she stated: “Until the Eighties the company prided itself on the fact that at least 90 percent of all goods sold in its stores were ‘Made in Britain,’ although since last year this is a policy that has been quietly eroding.
“Now the company can no longer even claim that ‘The majority of goods are made in Britain’ and, during 1998, imported £2billion of apparel.
“Also during 1998 around 30,000 jobs were lost from the UK textile and apparel manufacturing industry and, by the end of 1999, it was estimated that a further 50,000 jobs had gone as the industry increasingly moved abroad for its manufacturing.
Marks and Spencer swapped to foreign suppliers
The company was founded 136 years ago
“So as the year neared its end, the sudden and unexpected announcement that Marks and Spencer, Britain’s major retailer, was changing its buying policy to source over 70 percent (by 2002) of all its clothing from lower cost countries, came as a thundering blow to Britain’s apparel industry.”
But, Ms Tait revealed how these decisions had brutal consequences for factory workers in the UK as well.
She added: “The knock-on effect, of course, was of major potential job losses across the UK.
“Many factories faced almost immediate closure as M&S dropped its contracts with many of the suppliers, some well-known internationally for producing quality products under their own brand names, such as tailor DAKS Simpson.
“The plan is that M&S will still be buying goods directly from its remaining UK suppliers – and thus expecting the same quality standards – though the goods themselves will be sourced through these suppliers, from overseas at the lowest possible cost.
M&S used to have a heavy focus on clothing
“As a result, M&S claims it will obtain greater efficiencies and economies of scale, eliminate duplication in its buying operation and achieve annual cost savings of £400million on clothing by 2002.”
But, there were some companies that were hit harder than others and Ms Tait reports that one that was “chopped” had a 30-year relationship with M&S.
She added: “During the 18 months prior to this, Baird Clothing had already closed seven UK factories although, as one of the main four M&S suppliers, it still employed 4,360 employees in 16 factories within the UK and 2,900 within its 3 overseas factories.
“No one outside of M&S seems to understand why Baird should be unilaterally chopped across the board, all products, all departments, after 30 years as a supplier.
“Certainly some suppliers have lost some products and gained on others.
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The company switched to foreign suppliers in 2000
Marks has moved away from clothing since
“However, none of the other three key suppliers have escaped job losses over the years.
“Since 1979 the GMB (Britain’s General Union) states that Coats Viyella and Courtaulds have both lost more than 10,000 jobs each, and Dewhirst over 2,000, and have recently announced the loss of a further 1,000 through the overseas sourcing policy adopted by M&S.”
Following the switch to foreign suppliers, M&S also decided on a rebrand in 2001, acquiring the help of George Davies – the founder of Next – in an unprecedented move.
Profits initially went up, but after three years M&S bought out Mr Davies for £125million and financial woes returned, leading to a hostile takeover bid.
Marks and Spencer is still a favourite among Britons
M&S has shifted focus on to food
On November 9, 2010, chief executive Marc Bolland revealed plans to strengthen the company’s overall brand image, which involved the discontinuation of its ‘Portfolio’ fashion brand and the sale of electrical products.
But, on January 7, 2016, it was announced Mr Bolland would step down and be replaced by Steve Rowe, head of clothing.
Two years later, Stuart Machin was appointed Managing Director of Food to lead the transformation of the food business and the overall direction of the company away from clothing.
M&S core shops now typically feature a selection of the company’s clothing, homeware and beauty ranges and an M&S Foodhall.
But many stores are now standalone Foodhalls and in 2019, M&S launched five of these as part of the transformation of the business.
Published at Fri, 10 Jul 2020 16:20:00 +0000