Marks & Spencer is to offer a “buy now, pay later” option to online shoppers as part of a plan to modernise its struggling clothing business which had a “lost 18 months”, the company has admitted.
While maintaining its crown as the UK’s largest clothing retailer, sales at the high street giant have been falling for seven years. On Tuesday, its chief executive, Steve Rowe, told an investor meeting that letting customers pay for website orders in instalments was one of the “tactical actions” it planned to take to halt the slide. Rival chain Next has a substantial store card-style credit arm, and young shoppers are embracing digital payment systems such as Klarna in growing numbers. M&S is yet to sign a contract with a payment service.
M&S is facing an existential crisis as sales migrate online and the recent collapse in its share price has cost the retailer its place in the prestigious FTSE 100. Rowe confessed to analysts that the revamp of its clothing business was 18 months behind schedule and he was still trying to fix “the basics: its buyers still bought too many clothes that didn’t sell, while popular lines sold out. Jill McDonald, its clothing boss, was ousted in July after buying mistakes ahead of a jeans promotion left it with empty rails for a month.
While much of the focus falls on M&S’s womenswear business, the company admitted its menswear division needed attention after its market share had slipped by 1.5 percentage points over the last five years. Shoppers had told it the clothes were “too old” and the fightback involved it stocking more slim and skinny-fit trousers.
With the Brexit deadline looming the company told the investor meeting that crashing out without a deal would have a substantial impact on its food-hall arm, where sales have stabilised under Stuart Machin.
The turnaround is being steered by Archie Norman, its no-nonsense chairman of two years, and there are signs that he is growing impatient with performance. Last week the company said Humphrey Singer, its newish finance director, was, like McDonald, also headed for the exit.
Berenberg analyst Michelle Wilson said that until the overdue overhaul was complete the retailer was “fighting with one hand tied behind its back” against more agile peers. “We were left feeling that there is still a lot to do,” she said. The shares closed up nearly 2% at 187.75p.
