Marks & Spencer to step up revamp of stores after positive feedback

MARKS & Spencer will this week announce that it is stepping up the £600 million revamp of its stores after a positive response from customers.

Chief executive Marc Bolland launched 15 pilot store makeovers last autumn, designed to open up and clearly segment the selling space.

Bolland is expected to say at a trading update that a further 80 stores have been refurbished. The transformations, which include a more “local” approach towards product ranges, are expected to be extended to 550 of the retailer’s 731 stores by summer 2013.

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Freddie George, retail analyst at broker Seymour Pierce, said: “I have visited two of the new stores and I was impressed. One standout theme is that the various M&S brands are much more clearly segmented so the various age groups that use the stores know exactly where to find things.

“I think it is the right strategy but that it may take two or three years for M&S to educate the public to the changes.”

Bolland has told the City he is keen on a more localised approach to store product ranging, meaning that stores of the same size will no longer necessarily carry the same catalogue.

For instance, M&S’s Tamworth store has been segmented as a so-called “Family first” store, with a higher proportion of less high‑profile fashion and kidswear, because of the large concentration of young families in the surrounding area.

Stores in Scotland that now have the new look include Edinburgh’s Princes Street, and the M&S Simply Food outlets in The Docks, Dundee and in Milngavie. Major work is ongoing at flagship stores in Aberdeen’s St Nicholas Street, the Gyle, Edinburgh and Argyle Street in Glasgow.

The makeover of the store in the Gyle will also include M&S’s first Scottish in-store pasta-making machine.

The cost of the UK stores revamp is part of an extra £300m of capital expenditure over each of the next three years ordered by Bolland, in addition to the retailer’s existing annual investment of about £550m a year.

However, some analysts expressed some doubts as to whether the more definite demographic segmentation in the stores might backfire.

One said: “In one way it is a good idea, and may work. But there is always the risk it might alienate some customers who just like wandering through the whole store and don’t like even the suggestion of being typecast.”

Despite tough times for consumers, high street barometer M&S is expected to reveal modest annual sales progress at its fourth-quarter update on Tuesday.

In January the group posted 3 per cent growth in like-for-like food sales in the quarter to end-December, partly offset by a 1.8 per cent fall in sales in general merchandise, which is mainly clothing.

The City consensus for M&S’s full-year profits, due next month, is £697m, down 2.5 per cent on the 2010/2011 financial year.