Marks & Spencer Group Anaylsis

smart aline PROFILE attach and Spen conditioned emotion gathering plc REFERENCE CODE DFE67A38-E021-448F-BC58-3944E618713F PUBLICATION see to it 12 whitethorn 2012 www. grocery storeline. com COPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED yield AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED. label and Spencer gathering plc TABLE OF confine TABLE OF CONTENTS Company Overview. 3 attain Facts backing r depotering. 4 Histor y. 5 Key Employees.. 9 Key Employee Biographies.. 10 Major Products and Services. 6 Revenue analysis.. 17 tog up Analysis 18 Top Competitors . 25 Company consider.. 26 Locations and Subsidiaries. 29 label and Spencer host plc MarketLine pageboy 2 attach and Spencer crowd plc Company Overview union OVERVIEW mark and Spencer throng (M&S or the keep comparisontnership) is one of the conduct retailers of garment, intellectual nourishments and homew argon in the UK. The telephoner ope enjoins in more(prenominal) than 40 countries across eur opium, the dictate eastern, and Asia. It is principalquar tered in London, the UK and employs 78,169 people. The follow recorded taxations of ? 9,740. 3 cardinal ( round $15,158. 8 million) in the monetary category ended April 2011 (FY2011)*, an step-up of 2. 1% oer FY2010. The direct profit of M&S was ? 836. million (approximately $1,302. 5 million) in FY2011, a decrease of 1. 8% comp atomic number 18d to FY2010. The net profit was ? 612 million (approximately $952. 5 million) in FY2011, an out reaping of 16. 3% everyplace FY2010. *The financial stratum ended April 2, 2011 was a 52- calendar week period whereas the financial year ended April 3, 2010 was a 53-week period. KEY FACTS mental capacity Office tag and Spencer conclave plc Waterside star sign 35 Nor th furnish Road London W2 1NW GBR Phone 44 20 7935 4422 Fax blade Address http//www. marksandspencer. com Revenue / turnoer 9,740. 3 (GBP Mn) fiscal Year bar April Employees 78,169 London TickerMKS tag and Spencer Group plc MarketLine scalawag 3 mark and Spencer Group plc vexation Description BUSINESS DESCRIPTION M&S is the retentivity social club of the attach & Spencer Group of companies. The participation is one of the UKs star retailers, with more than 21 million people visiting its investment social clubs each week. M&S forthers robes and home mathematical breaks, as well as sustenances, sourced from intimately 2,000 suppliers glob each(prenominal)(prenominal)(a)y. It operates by dint of both wholly induceed stores and franchise stores. As of FY2011, the connection operated 703 stores in the UK. M&S operates over 361 owned and franchised stores in over 42 territories.though the company primarily repor ts its revenues in terms of geographic pieces (UK and supranational), its trading operations trick be categorized downstairs ii component parts victuals and global wargon. The food division narrows on quaternity main areas fresh, natural, healthy food special celebration products au indeedtic ready meal regard-alikes and exceptional for ever yday food such(prenominal) as Oakham chicken. It operates a chain of 163 evidently viands owned stores and 202 provided victuals franchise stores in eminent streets, super juicyway service stations, plainway stations and air por ts in the UK.The general switch division of the company is categorized into two segments robes and home. The wearable segment offers womens wear, mens wear, lingerie, childrens wear, and accessories and footwear. Some of the prominent blades offered by this segment allow Autograph, exceptional Collection, Collezione, sour Harbour, Girls B surfaceique, Per Una, Ceriso, Adored, and Truly you. The home segment offers homeware and home accessories, kitchen and tableware, lighting, and furniture products. In addition to selling products by dint of regular stores, the segment besides offers memorial services.M offers its products and services on line as well as through flagship stores, steep street stores, retail park stores, M outlets, Simply nutriment stores, and Simply sustenance franchised stores. mark and Spencer Group plc MarketLine paginate 4 tag and Spencer Group plc story HISTORY M was founded in 1884 as a st exclusively in an open market in Leeds, the UK. Then known as attach centime Bazaar, it was the household goods, haberdasher y, toy, and sheet-music business of Michael Marks, a Jewish refugee from Poland. In 1894, he took Thomas Spencer as a business par tner.In 1903, M&S was registered as a private limited company. Although a clothing human body depar tment had rootage been set up in 1938, it was non until after the gage World War that it became fully developed beneath a leaders designer. In 1973, the company entered Canada, and bought Peoples Depar tment hold ons and DAllairds, a national womens wear retailer, both of which it after sold. The company similarly had direct retailing investmen ts in Canada. It tried to touch south of the b order in 1988 with the purchase of Brooks Brothers, but the US operation never took off as the company had hoped.Five franchised stores were blottod calibrate in Tur anchor in 1999 when the franchise par tner Turk Petrol memory couldnt meet its bank obligations and collapsed. subsequent in the year, Marks and Spencer Canada, after 25 days of business, closed its 38 stores. The company sold its US clothing chain Brooks Brothers for $225 million in 2001. In 2003, M&S announced the launch of its &more corporealisation card. Alongside this, Marks & Spencer Financial Services was re- gulled Marks & Spencer Money. In 2004, M&S completed the gross sales event of Marks & Spencer retail Financial Services Holdings (M&S Money) to HSBC.During the course of 2005, the company undetermined 31 Simply Food stores as well as closed the Lifestore project in the UK. M&S spread out the Simply Food format with the acquisition of 28 stores on a leasehold land from Iceland Foods for a consideration of ? 38 million (approximately $76. 3 million) in 2006. In the same year, M&S sold Kings Super Markets, its only non-M&S scratched business to a US investor group consisting of Angelo, Gordon & Co, MTN Capital par tners and Mr. Bruce Weitz for $61. 5 million in cash.In 2007, M&S and two of its long-run suppliers decided to star t the development of M&S first eco-factories, pioneering sophisticated methods of sustainable manufacturing. One factor y in Sri Lanka would make lingerie and two factories in Nor th Wales would manufacture furniture upholster y. In the same year, the company launched its own branded LCD widescreen TVs. This be adrift was in addition to the existing collection of Sony TVs currently available at M. hide ther in the year, M launched school wear make from cycled plastic bottles.The companys first standalone home store in Lisburn, Nor thern Ireland was launched in 2007. In the same year, M&S launched B ig & Tall, an exclusive online mens wear offering more than 450 items online ranging from tailoring to knitwear to casual shir ts and trousers. Also in 2007, M overturnd virginal fat level as much as 82% in more than 500 companys products. The company cut saturated fat levels in products including sandwiches, ready meals, crisps and savor y snacks. Marks and Spencer Group plc MarketLine knave 5 Marks and Spencer Group plc account teachingTowards the end of 2007, a unexampled Made to pulse shir ts ser vice was launched by M&S, which allowed nodes to design a tailor-made shir t within 21 days. The company added novel-fangled products to its mens wear por tfolio in FY2008. M too launched climate control underwear featuring temperature regulating engineering science developed by NASA, grow Collezione brand collection by introducing unfermented shoes, wool and cashmere mix trousers. M reinvigorated its Blue Harbour brand to attract 35 to 44 year old men. Also in FY2008, t he company star ted to abandonze its ready meals for international sale and launched a mold of 70 lines in eight countries.Later, the company likewise launched a 25-piece capsule collection called GD25 from Per Una. In 2008, M removed ar tificial color and flavorings from its entire food and soft drinks range. In the same year, the company improve the quantity of station in a number of major(ip)(ip) out of towns and city centre stores through store extensions and as well added 35 stores to its Simply Food por tfolio, including 25 BP franchised stores. A innovative flagship store in radical Westfield Centre at White City, West London was overt at the end of 2008.To fur ther progress in Asian markets, the company opened its first 38,000 square feet store in Shanghai. M then entered into a par tnership with Scottish and Southern Energy, as per which M Energy would offer electricity and gas to domestic customers and reward them with M store vouchers for percentage the purlie u by reducing their strength usage. M announced designs to close 10 of its Simply Food stores in 2009. The company opened Food to Go outlets in Hong Kong in the same year. Also in 2009, M announced intentions to enter clean categories in the Indian market, with the launch of luggage and footwear for men.The company introduced a Ramadan and Eid fashion collection in all the 13 stores throughout the Middle East in the UAE, Bahrain, Qatar, Kuwait and Oman in 2009. Fur ther in the year, M launched personalized greetings separate business online. The company in like manner announced to open its trice mainland store in Guangzhou, the enceinte of Guangdong province in southern china. M also launched a beer and cider range to complement its wine selection. M launched a revamped version of its website in 2009, the first major update since 2007.Fur thermore, in 2009, the company began to offer its online international comport y service to 73 more countries as par t of a coerce to grow annual sales of M Direct. The company began its offering within the homeware sector in 2009. M announced inventions to open a store in Marbella, Spain by the end of 2009. In the same year, M and India-based Reliance Retail envisionned to open approximately 50 stores in India in the adjacent basketball team old age under the banner of their join venture company Marks & Spencer Reliance India. Later in the year, the company outlined plans to cut be by ? 50 million (about $150 million) by optimizing its supply chain and IT systems. M also announced plans to open a new store at the Swords Pavilions shop center in the Dublin Airpor t, Ireland, in 2009. The company opened its new 22,000 square feet store at Morpeths Sanderson Arcade in the same year. M&S decided to launch Simply Food in western Europe. Fur ther in 2009, the company announced plans to sell a selected range of nearly 400 branded grocery and household products in all of its UK stores, future(a) a 16-month tria l in its stores in the Nor th East and South East of England.In 2010, M&S launched a new sign of the zodiac Energy Service division that would offer customers a suite of power efficiency products and services. Building on the success of M&S Energy, which was work Marks and Spencer Group plc MarketLine varlet 6 Marks and Spencer Group plc History over 125,000 homes, the company would roll-out a number of new products including bespoke strength advice, renewable energy solutions such as solar panels and heat pumps, and energy efficient heating solutions.In the same year, M&S announced a course to be the worlds almost sustainable retailer by 2015, open 80 major new freights under M eco and ethical plan, curriculum A. The new freights pull up stakes mean that the company verifys all M&S products extend intend A products with at least one sustainable part. This program will also enable the companys 2,000 suppliers to adopt Plan A trump practice and encourage M customers and employees to live greener lifestyles. Fur ther in 2010, M launched a new version of www. marksandspencer. om designed specifically for use on mobile phones and mobile devicesthe first mobile site from a major UK lofty street retailer. Through this, the company aims to expand its multi-channel offering. During the same year, M launched England Football team suit exclusively in M stores, to relegate advantage of the football World cup disbursal. The company opened its new 1. 1 million square feet distribution centre at ProLogis super acid Bradford in the UK in 2010. This warehouse in the UK will serve all the companys stores with furniture products and store equipment.Later in 2010, M&S launched a range of Solar PV and Solar Thermal water heating solutions. Fur thering the sustainability initiatives, the company also announced that it will use polyester made from recycled PET drinks bottles preferably of virgin polymer to make more than 300 million clothing grapple labels a year. Towards the end of 2010, M&S announced plans to move into rail distribution to reduce its carbon footprint. More than 300,000 general ware products per week would move from road to rail distribution. The company also opened a new shopping center in Vilnius, Lithuania at the end of year.In April 2011, M&S opened its greenest ever store at Ecclesall Road in Sheffield. This is the first store of a number of new Sustainable encyclopaedism stores planned by the company as par t of its learn to reverse the worlds most sustainable major retailer by 2015. The company opened 20 stores in the UK during FY2011, including 17 Simply Foods. In international, M opened 49 new stores and closed 15 stores. During the same period, the company entered the Egyptian market with a 28,000 square feet store in the not bad(predicate) Mega sum in Cairo.The company, in July 2011, launched a new iPad exertion for its investors. This application will provide investors with latest M financial news. In the pastime month, M signed a traceability deal with past Futures. As per the deal, Historic Futures will provide the company full traceability on ever y single clothing and home product it sells. M is the first major retailer to commit to full traceability for non-food products. In September 2011, M opened a new store at Westfield, Stratford City with the latest only(prenominal) at Your M innovations and customer experiences.In the following month, M&S launched its new french website, http//www. marksandspencer. fr/, marking its first international transactional website. Marks and Spencer Group plc MarketLine page 7 Marks and Spencer Group plc History The company, in November 2011, opened its new flagship store at 100 Avenue des Champs-elysees in Paris. M&S, in February 2012, launched its outlet format on its website at www. marksandspencer. com/outlet. M&S Outlet will permanently offer a selection of more than 1,300 quality M&S clothing products with up to 40% off the reg ular high street and online prices.In the same month, the company recalled four products (Crispy runt Wonshort ton, Crispy Vegetable Balls, Prawn Baguette Toast, and Prawn Siu Mai Selection) from its Chinese range overdue to mistake in use by date. In border 2012, the company, announced plans to launch a new website for its Irish customers, http//www. marksandspencer. ie/. In April 2012, M&S announced that it will accept ill-used habiliments at UK outlets in order to recycle into other fabrics or employ overseas by the Oxfam charity in an aim to cut redundance. Marks and Spencer Group plc MarketLine rapscallion 8 Marks and Spencer Group plcKey Employees KEY EMPLOYEES let out duty prenomen control panel Marc Bolland question decision maker policeman administrator director control panel 975000 GBP Alan Stewar t master(prenominal) finance Officer executive notice 550000 GBP Kate Bostock decision maker coach, General intersection executive table 590000 GBP John Dix on executive director theatre director, Food executive director circuit board 540000 GBP Steven Sharp administrator coach, merc progressising executive venire 655000 GBP Laura Wade-Gery decision maker manager, Multi-channel E-commerce decision maker circuit card Amanda Mellor Group Secretar y and heading of somatic Governance executive age Rober t Swannell president of the carteNon executive director control board Vindi Banga director Non executive Board Miranda Cur tis theatre director Non executive director Board Jeremy Darroch Director Non Executive Board 85000 GBP Steven Holliday Director Non Executive Board 85000 GBP Mar tha avenue Fox Director Non Executive Board 70000 GBP Jan du Plessis Director Non Executive Board 70000 GBP Clem Constantine Director, undecomposed ty precedential Management Tanith Dodge Director, pitying Resources senior Management Dominic Fr y Director, communications and Investor Relations senior(a) Management Jan Heere Director, International Senior Management Nayna McIntoshDirector, depot Marketing and invention Senior Management Steve Rowe Director, Retail Senior Management Darrell beer mug Director, selective information Technology and Logistics Senior Management Marks and Spencer Group plc MarketLine Compensation 450000 GBP Page 9 Marks and Spencer Group plc Key Employee Biographies KEY EMPLOYEE BIOGRAPHIES Marc Bolland Board Executive Board Job epithet Chief Executive Officer Since 2010 Mr. Bolland has been the Chief Executive Officer at Marks and Spencer Group since 2010. Previously, he was the Chief Executive Officer at Morrisons Supermarkets from 2006 to 2010.Prior to this, Mr. Bolland worked at Heineken for 20 age in various management theatrical roles, including Executive Board member and Chief operating(a)(a) Officer, and responsibility for operations and business development in the US, France, Italy, Spain, the Caribbean and Latin America. He also ser ves as a Director at Manpower. Alan Stewart Board Executive Board Job Title Chief Finance Officer Since 2010 Mr. Stewar t has been the Chief Finance Officer at Marks and Spencer Group since 2010. forrader joining the company, he was the Chief Financial Officer at AWAS, an aircraft leasing company. Mr.Stewar t played out 10 years at HSBC Investment Bank forwards joining Thomas Cook in 1996, where he held various older roles, including Chief Executive at Thomas Cook UK. Mr. Stewar t conjugate WH Smith in 2005 as Group Finance Director. He also ser ved as a Non Executive Director at Games Workshop Group. Kate Bostock Board Executive Board Job Title Executive Director, General Merchandise Ms. Bostock is the Executive Director of General Merchandise at Marks and Spencer Group. She united the company in 2004. Previously, Ms. Bostock was the Product Director for Childrenswear at Next from 1994.She also ser ved as the Product Director for the George brand covering all areas of clothing and footwear at Asda. John Dixon B oard Executive Board Job Title Executive Director, Food Marks and Spencer Group plc MarketLine Page 10 Marks and Spencer Group plc Key Employee Biographies Since 2009 Mr. Dixon has been the Executive Director of Food at Marks and Spencer Group since 2009. He joined the company as a Store Management Trainee. Mr. Dixon held various senior roles at the company for over 20 years, including Executive Assistant, Chief Executive, and Director of national and M&S Direct.Steven Sharp Board Executive Board Job Title Executive Director, Marketing Mr. Sharp is the Executive Director of Marketing at Marks and Spencer Group. He joined the company in 2004. Previously, Mr. Shar p served as the Marketing Director at Asda, the Bur ton Group, Booker, and Arcadia Group. Currently, he is a Non Executive Director at Adnams. Laura Wade-Gery Board Executive Board Job Title Executive Director, Multi-channel E-commerce Since 2011 Ms. Wade-Gery has been the Executive Director of Multi-channel E-commerce at Marks and Spencer Group since 2011.Prior to this, she worked at Tesco and held a variety project of senior roles, including Chief Executive Officer of Tesco. com and Tesco Direct. Ms. Wade-Ger y also held various roles at Gemini Consulting and Kleinwor t Benson. She has also been a Non Executive Director at Trinity Mirror since 2006. Amanda Mellor Board Executive Board Job Title Group Secretary and go of Corporate Governance Ms. Mellor is the Group Secretary and Head of Cor porate Governance at Marks and Spencer Group. She joined the company in 2004 as the Head of Investor Relations. Ms.Mellor spent her primal charge in investment management at James Capel ahead becoming a Director within its Corporate Finance team. She then served at Rober t Fleming, Investment Banking prior to joining The Bur ton Group as the Director of Cor porate Relations and Investor Relations. Robert Swannell Board Non Executive Board Job Title Chairman of the Board Marks and Spencer Group plc MarketLi ne Page 11 Marks and Spencer Group plc Key Employee Biographies Since 2011 Mr. Swannell has been the Chairman of the Board at Marks and Spencer Group since 2011.He joined the company in 2010 as a Non Executive Director. Prior to this, Mr. Swannell was a Senior Independent Director at The British Land Company, and 3i Group. He spent over 30 years in investment banking at Schroders/Citigroup. Mr. Swannell was antecedently the Vice Chairman at Citi Europe and Co-Chairman at Citis European Investment Bank. Vindi Banga Board Non Executive Board Job Title Director Since 2011 Mr. Banga has been a Director at Marks and Spencer Group since 2011. He is currently a Par tner at Clayton Dubilier & Rice, a private equity investment firm. Prior to this, Mr.Banga spent 33 years at Unilever, where he held several senior positions, including hot seat of the Global Foods, Home and Personal Care businesses, and was a member of the Unilever Executive Board. He also serves as a Non Executive Director at Thomson Reuters and Maruti Suzuki India. Miranda Curtis Board Non Executive Board Job Title Director Since 2012 Ms. Cur tis has been a Director at Marks and Spencer Group since February 2012. She is currently the Chairman at Waterstones, and a Non Executive Director at Liber ty Global. Ms. Cur tis has also been a Non Executive Director at theme Express Group since 2008.She also serves on the Boards of the Institute for Government, the Royal Shakespeare Company, and Camfed (the leading Afri keep girls education charity). Jeremy Darroch Board Non Executive Board Job Title Director Since 2006 Mr. Darroch has been a Director at Marks and Spencer Group since 2006. He also ser ves as the Chief Executive at British Sky Broadcasting. Previously, Mr. Darroch ser ved as the Chief Financial Officer at British Sky Broadcasting. Prior to this, he was the Group Finance Director and Retail Finance Director at Dixons Retail (formerly DSG International). Marks and Spencer Group plc MarketLine Page 12 Marks and Spencer Group plc Key Employee Biographies Steven Holliday Board Non Executive Board Job Title Director Since 2004 Mr. Holliday has been a Director at Marks and Spencer Group since 2004. He is the Group Chief Executive Officer at subject Grid. Prior to that, Mr. Holliday served as the Director of UK and Europe and was liable for the UK Electricity and Gas businesses. He is also the Chairman of the UK Business Council for Sustainable Energy. Prior to joining National Grid, Mr. Holliday was an Executive Director at British Borneo Oil and Gas.Previously, he held several senior positions at Exxon Group. Martha Lane Fox Board Non Executive Board Job Title Director Since 2007 Ms. Fox has been a Director at Marks and Spencer Group since 2007. She is the UKs Digital Champion, the Chairman of Race Online 2012, and a Non Executive Director at Channel 4 Television. Ms. Fox is founder and Chairman of Lucky Voice, and of her own grant-giving foundation, Antigone. She was co-founde r of lastminute. com. Jan du Plessis Board Non Executive Board Job Title Director Since 2008 Mr. du Plessis has been a Director at Marks and Spencer Group since 2008.He is the Chairman at Rio Tinto. Previously, Mr. du Plessis was the Chairman at British American Tobacco and a Non Executive Director at Lloyds Banking Group. He also ser ved as the Chairman at RHM from 2005 to 2007. Mr. du Plessis was previously the Group Finance Director at Richemont, a position he held until 2004. Clem Constantine Board Senior Management Job Title Director, Proper ty Mr. Constantine is the Director, Proper ty at Marks and Spencer Group. He joined the company in 2006. Mr. Constantine was prescribed the Group Proper ty and Retail Planning Director at Arcadia Group in 1999.He was decreed to his first finance directorship in 1993, for the IS brand at the Marks and Spencer Group plc MarketLine Page 13 Marks and Spencer Group plc Key Employee Biographies Bur ton Group, and moved through several other fin ance directorships with variable responsibilities including systems and retail. Mr. Constantine was trained as a Char tered Accountant at Stoy Hayward, and joined Debenhams in 1989 as a Financial Analyst. Tanith Dodge Board Senior Management Job Title Director, compassionate Resources Since 2008 Ms. Dodge has been the Director, Human Resources at Marks and Spencer Group since 2008.She was formerly the Group Human Resources Director at WH Smith since 2003. At WH Smith, Ms. Dodge was also responsible for customary Relations, Communications and Post Office Operations. Prior to this, she was the Senior Vice President Human Resources for Europe, Middle East and Africa (EMEA) at InterContinental Hotels Group. Ms. Dodge also served as the Human Resources Director at Diageos two business divisions. She was also the International Human Resources Manager at Prudential Corporation. Dominic Fry Board Senior Management Job Title Director, Communications and Investor RelationsMr. Fry is the Dir ector, Communications and Investor Relations at Marks and Spencer Group. He joined the company in 2009. Prior to this, Mr. Fr y ser ved at Tulchan Communications. In 1996, he was appointed the Communications Director at J Sainsbury and ser ved in the same role at ScottishPower from 2000 to 2005. In 1989, Mr. Fr y became the Communications Director at AT&T in the UK out front moving from there to head up communications at the Channel Tunnel in the middle 90s. He star ted his career in 1982 working in PR consultancy at Traverse-Healy & Regester and then Charles Barker.Jan Heere Board Senior Management Job Title Director, International Since 2011 Mr. Heere has been the Director, International at Marks and Spencer Group since 2011. He joined Inditex in 2002 where he held a several international roles, most recently as General Manager for Inditex Russia. During 200002, Mr. Heere held various senior management roles at Zara, Groupo Inmobiliario Lupaco, and Charanga. He began his career at Manpower in Spain in 1997. Nayna McIntosh Marks and Spencer Group plc MarketLine Page 14 Marks and Spencer Group plc Key Employee BiographiesBoard Senior Management Job Title Director, Store Marketing and Design Ms. McIntosh is the Director, Store Marketing and Design at Marks and Spencer Group. She joined the company in 2005. Prior to this, Ms. McIntosh was par t of the Management Team that set up the per una brand in 2001. Previously, she served as the Sales and Marketing Director for the George brand at Asda stores. Before joining George, Ms. McIntosh was at Next for four years as a Divisional Executive for the South of England. Steve Rowe Board Senior Management Job Title Director, Retail Since 2008 Mr.Rowe has been the Director, Retail at Marks and Spencer Group since 2008. He joined the company in 1989 and held a variety of positions in store management, having previously worked at Topshop as a Store Manager. Mr. Rowe joined Head Office in 1992 as a merchandiser for Mens wear. In 1998, he was promoted to Category Manager in the Furniture Depar tment. In 2001, Mr. Rowe led the team developing the Home Growth Strategy, working with McKinsey Consultants, and became Head of Home categories in 2003. He was promoted to the Director of Home a year later in 2004. From 2004 to 2008, Mr.Rowe was also responsible for Beauty and refreshing Business Development. Darrell Stein Board Senior Management Job Title Director, study Technology and Logistics Mr. Stein is the Director, Information Technology and Logistics at Marks and Spencer Group. He has been working in IT for 17 years star ting his career at the company in 1990. Mr. Stein re-joined M in 2006 as the IT Director. From 2001 to 2006, he ser ved at Vodafone, becoming IT Director for Vodafone UK in 2004. Prior to this, Mr. Stein was Vodafones UK Network Director and Global IT Strategy and Architecture Director.From 1996 to 2001, he ser ved at Ernst & Young, leading a number of major IT and Change Programme s in the financial services, retail and utility sectors. In 1994, Mr. Stein joined Mars as a Project Manager. Marks and Spencer Group plc MarketLine Page 15 Marks and Spencer Group plc Major Products and Services MAJOR PRODUCTS AND SERVICES M&S is one of the leading retailers of clothing, foods and homeware in the UK. The companys key products and services include the following Products Womens wear Mens wear Lingerie Childrens wear Footwear Food and grocery items Homeware and home accessoriesKitchen and tableware Lighting Furniture products Services Credit cards Car, home, travel, and pet insurance Personal loans Brands Autograph limit Collection Collezione Blue Harbour Girls Boutique Per Una Ceriso Adored Truly you Marks and Spencer Group plc MarketLine Page 16 Marks and Spencer Group plc Revenue Analysis REVENUE depth psychology Overview The company recorded revenues of ? 9,740. 3 million (approximately $15,158. 8 million) in FY2011, an cast up of 2. 1% over FY2010. For FY2011 , the UK, the companys hoi polloidst geographic market, accounted for 89. 7% of the amount revenues.M generates revenues through two business divisions food (51. 5%% of the total revenues in FY2011), and general merchandise (48. 5%). Revenues by division* During FY2011, the food division recorded revenues of ? 4,499. 4 million (approximately $7,002. 4 million), an add of 1. 9% over FY2010. The general merchandise division recorded revenues of ? 4,233. 6 million (approximately $6,588. 8 million) in FY2011, an increment of 2% over FY2010. *The revenue breakdown by division is only for the revenues from the UK market. Revenues by geography The UK, M largest geographical market, accounted for 89. % of the total revenues in FY2011. Revenues from the UK reached ? 8,733 million (approximately $13,591. 2 million) in FY2011, an increase of 1. 9% over FY2010. International operations accounted for 10. 3% of the total revenues in FY2011. Revenues from international operations reached ? 1, 007. 3 million (approximately $1,567. 7 million) in FY2011, an increase of 4% over FY2010. Marks and Spencer Group plc MarketLine Page 17 Marks and Spencer Group plc attire Analysis SWOT summary M&S is one of the leading retailers of clothing, foods and homeware in the UK.The company has expanded its food product offering significantly in the recent years. New products launches, focus on expanding healthy products, promotions, and competitory prices are all fate the company attract customers in a highly private-enterprise(a) market. However, puff in shoplift could negatively impact the cost complex body part for M&S. Strengths Weaknesses Expanding food offering Strong market position in the clothing segment Geographical magnification to increase the addressable market and reduce vulnerability to mount up UK market M&S etched a highly effective CSR schema M&S bequest stores and systems are a ompetitive disadvantage Declining general merchandise division sales due to inad equate stocking Opportunities Threats Online channel continues to boom and will enable M&S to supercharge revenues Focus on china and India can lead to amplification in two of the fastest growing markets Surge in shoplifting losses costs the retailers and customers Weak consumer spending in the UK Rising delve cost in the UK Strengths Expanded food offering The company has expanded its food product offering significantly in the recent years. In 2009, M&S consistently highlighted it is cheaper than Waitrose on a basket of 1,200 items by about 2%.The company, in 2009, decided to invest in its margins in order to provide its customers better value. As a result of this, M&S saw improved perceptions of value by its customers. The company, in FY2011, launched around 1,800 new products in food and positioned itself as the UKs leading high quality food retailer. The key product launches of the company include savour Italia, and Made Without pale yellow range of gluten-free bread and c akes, With the success of Made Without Wheat product range, the company launched gluten-free sandwiches, sausages, stuffing, and crisp bakes.As of FY2011, the company offered 125 gluten-free products. M&S also became the UKs randomness largest favorite health food brand with the launch of its Simply Fuller Longer range which encourages customers to manage their lading with a menu plan. The gross margin of food division change magnitude by 20 basis points to Marks and Spencer Group plc MarketLine Page 18 Marks and Spencer Group plc SWOT Analysis 30. 8% in FY2011. This was in the main driven by better management of promotions and waste. Fur ther, in the four th quar ter of FY2012 ended March 2012, M&S launched 500 new products in the food division.The sales in this quar ter increased by 3. 1%, The companys promotions such as roast dinner for ? 5 ($7. 8), Dine In, etc offered its customers with great value solutions for special occasions. M&S food division has been consummateing well in a ver y competitive market and against tough competitors. By launching innovative products and with an expanded food offering, the company has been able to attract the customers in a highly competitive market. Strong market position in the clothing segment M&S has a strong market position in the clothing segment.With more than one in 10 clothing items bought from M&S, the company ranks amongst the three largest clothing retailers in the UK. According to a repor t released by Verdict (Datamonitors retail arm) in May 2012, M is known for its product quality. The company was ranked first with a s amount of 49 for its product quality above the market mean(a) of 23. According to another repor t released by Verdict in April 2012, M enjoys highest conversion rate of 50. 7% and is very successful in conver ting visitors to loyal main users through its varied product offer, in-store service and garment quality.This indicates that M is a trustwor thy brand, which all main users would return to knowing that the quality, fit, and ser vice are reliable and consistent. The retailer has recognized that its core market of predominantly good customers has been especially aphonic hit by rising core costs of living, falling evoke on savings and worse prospects for pensions, and in reaction has lowered its entr y prices to compete more effectively with high street/value operators and supermarkets, dower to maintain the loyalty of its main users and prevent them from shopping elsewhere.Verdict, in its repor t in March 2012, ranked, M seventh in the global depar tment store market with a share of 3. 2%. This market leadership enabled M to excel throughout the economic downturn, period other mid-market retailers are pressured from the ever expanding value players. Leading market position indicates access to a large customer base and also popularity of M offering in the clothing segment. dismissal forward, this market position would enable the company to drive revenues as consumer spending recovers.Geographical expansion to increase the addressable market and reduce vulnerability to mature UK market With a por tfolio of over 361 owned and franchised stores in 42 territories M&S continues to grow its international business. This mix of ownership models and countries enabled the company to perform well in FY2011, even when individual markets were weak. Fur ther, during FY2011, the company entered the Egyptian market with a 28,000 square feet store in the Dandy Mega Mall in Cairo. M&S international business grew by 4% in FY2011 despite tough economic situation.As an established retailer in a mature market, it is going to be hard for M to continually depict significant increases in UK sales. However, in the long run, its international business offers an oppor tunity for high growth. By generating much higher volumes, it can stage margin benefits with suppliers. With drudgery costs rising, this will be an advantage in the UK. International expansio n will enable the company to access multiple sales points for most of the product ranges. This is especially relevant for clothing and homewares segments.Also, through expansion in the international markets M can reduce Marks and Spencer Group plc MarketLine Page 19 Marks and Spencer Group plc SWOT Analysis vulnerability to mature UK market. The company can also par ticipate effectively in whatsoever of highest growing markets such as China and India. All these factors would enable the company to reduce the overall business risk and facilitate increased revenues. M etched a highly effective CSR strategy M has to its credit an effective corporate social responsibility (CSR) strategy.CSR has been gaining prominence not practiced among the stake holders and governments but the consumers as well. The company has the highest propor tion of consumers believing it to be a responsible retailer and this can largely be attributed to the success of its Plan A, a ? 200 million (approximately $320. 3 million) 100-point plan launched in 2007 with five areas of focus climate change, fair par tnership, health, sustainable raw materials, and waste. In FY2011, the company included two more areas in its Plan A involving customers, and making Plan A how we do business.In the last few years, initiatives launched under the Plan A banner include launching the companys first eco-store, boost suppliers to set-up eco-factories, removing hydrogenated fats from its ready meals, increase the propor tion of organic food, reducing the salt content of its produce, cer tifying a larger percentage of its look for as originating from sustainable populations, and theme to sell recycling and composting bins. It is the high profile presence of Plan A in adver tising campaigns, product labeling and store signage that gives M&S one of the best consumer perceptions of a retailer for social responsibility.The campaign works not simply as a direct to consumer channel, but also because of the pos itive reporting it creates. Perhaps more impor tantly, it has publicized all of these initiatives extensively. In 2008, M&S launched a TV adver tising campaign focusing on its ethical, environmental and health-conscious credentials, highlighting that it only uses free range eggs and that its products are now free from ar tificial colors and flavorings. another(prenominal), more innovative, ideas acquire included a joint venture with Oxfam to promote the recycling of old clothes.In addition, more controversially, the retailer introduced a 5p charge for carrier bags at all of its food depar tments in 2008. Though many consumers resented this charge, it has undoubtedly boosted M&S re put downation as an ethical retailer. Overall, sculpting its CSR strategy into such a high publicity campaign, divided into such travel by action points and highly visible benefits, has seen the company move to the forefront of responsible retailing. In FY2011, the company launched Indigo Green, its f irst range of clothing made using more sustainable fabrics.In April 2012, the company announced to accept secondhand clothes at all the UK outlets except Simply Food stores, to recycle them into other fabrics or to reuse them in order to cut waste. Plan A has seen CSR become core to M principles in the eyes of the consumer and it has reaped the benefits of this, gaining shoppers as a result and repor tedly saving more than ? 70 million (approximately $108. 9 million) in efficiencies gained in FY2011 compared with ? 50 million (approximately $77. 8 million) in FY2010.In addition, M&S improved energy efficiency in its stores by 23% and warehouses by 24% in FY2011 compared to FY2007. It also improved the fuel efficiency of its deliver y fleets by 20% and total carbon emissions piddle been reduced by 13%. The company now recycles 94% of all the waste it generates from its stores, offices and warehouses. The total waste is down by more than a third. M&S also met its sustainable standard s by sourcing 90% of wild fish in FY2011 (62% in FY2010) and 76% of wood in FY2011 (72% in FY2010). Marks and Spencer Group plc MarketLine Page 20 Marks and Spencer Group plcSWOT Analysis By actively promoting a products greener attributes (for example fewer, more recognizable and natural ingredients), retailers such as M have positioned products as improving ones personal environment while benefiting the global environment too. Many of their successes have come from punctuate the former rather than the latter, especially as consumers often associate ethical motive with a sense of wellbeing. In terms of the issues that concern consumers, the sustainability of natural resources is a major fear, as are climate change and the fairness of sourcing arrangements.Consumers are also attracted to products with health benefits and there is a clear trend that consumers can be persuaded to par t with more money in return for products with a positive impact, not just to them personally, but al so to wider society. Indeed, differentiating in the midst of products becomes harder and harder to achieve, Verdict expects consumers to turn to auxiliary considerations such as ethicality and sustainability to postulate their choices. Consumers are no longer purely satisfied with how a product looks and functions they pauperization assurances over aspects such as nvironmental impact, hygiene, safety, and fairness. In light of the above mentioned trends where the customer choices are increasingly guided by the sustainability issues, M&S will benefit due to its reputation of being a responsible retailer. Weaknesses M&S legacy stores and systems are a competitive disadvantage M&S suffers few(prenominal) competitive disadvantages compared to Tesco, which has been able to drive earnings before interest and tax (EBIT) growth even in the mature UK market. Tesco benefits from supplier power and state-of-the-ar t IT, supply chain and systems compared with M&S legacy systems.The superma rket retailer has been able to break up the contend cur ve with metro, transport and big box store formats out of town and on the high street. Moreover, Tesco stores have been carefully designed with consistent store layouts in order to facilitate store navigation. Extra back room store space has also been allocated to allow for smooth execution of its picking and distribution model. Tesco sells both own label and branded goods (food and non-food) in a bid to drive up footfall and sales conversion. M&S legacy stores are inconsistent in terms of layout.Store size tends to dictate product availability, while a lack of back room store space does not facilitate the same style supermarket pick and delivery model. The legacy systems and stores of M&S are constraining effective servicing of customer demands on a consistent basis. This is placing the company at a clear competitive disadvantage compared to a formidable opponent, Tesco. Declining general merchandise division sales due to in adequate stocking The companys general merchandise division sales declined in recent times, M&S general merchandise division sales decreased by 2. % in the four th quar ter of FY2012 ended March 2012. This was mainly due to shor tage of stock in its stores, reachable to this, the company was also not able to meet customer demand for 300,000 knitwear garments under the M&S Woman label. It only sold Marks and Spencer Group plc MarketLine Page 21 Marks and Spencer Group plc SWOT Analysis 100,000 knitwear garments during this period. Fur ther, in times of high demand, inadequate stock could interrupt the sales of the division and result in loss of sales to competitors.This not only affects the revenues of the company but could also result in press of customers to its competitors. Opportunities Online channel continues to boom and will enable M&S to boost revenues Online retail sales in the UK have grown significantly over a period of time. According to Office for National Statistic s, non-seasonally adjusted average weekly value for earnings retail sales in the UK was ? 414 million (approximately $644. 3 million) in Februar y 2010, this increased to ? 573. 6 million (approximately $892. 7 million) in February 2012, representing an increase of 18%.Internet sales accounted for only 8% of the total retail sales (excluding fuel) in Februar y 2010. This figure increased to 10. 7% in February 2012. The growing desire for convenience is seeing shoppers buy more online, especially in the category of food and grocery. Consumers have also become savvier, using the internet more to get the best deal they can. verifier codes, and cashback sites have been instrumental in this. Additionally, improved deliver y and fulfilment options have been encouraging consumers to shop more online.The company operates in the internet channel through M&S Direct where the products are offered through website and newly launched Shop Your Way facility, a new ordering service that has been rolled-out in 444 stores (including 151 in Simply Foods stores) during FY2011, allowing customers to place orders either in stores, online or over the phone, for deliver y to either a nominated address or free of charge to their nearest store. M&S Directs sales increased from ? 413 million (approximately $642. 8 million) in FY2010 to ? 543 million (approximately $845. million) in FY2011, an increase of 31. 5%. Fur ther, in the first half of FY2012, M&S Directs sales increased by 11. 7% with more than three million visitors per week. Thus, by leveraging its online presence, M&S can cater to the requirements of a growing number of customers who are flavor for convenience and better deals over the internet. Focus on China and India can lead to expansion in two of the fastest growing markets China and India are two economies which are recording highest growth rates which, in turn, are expected to aid the retail market growth in these two countries.Asias retail sales are estimated to in crease with China operate the growth. According to the preliminary estimation, the gross domestic product (GDP) of China was CNY47,156. 4 billion ($7,285. 7 billion) in 2011, a year-on-year increase of 9. 2% at comparable prices. The fast pace economic development in China coupled with the rise of the middle physique income group and their increasing available income have fur ther pushed up the demand for several consumer goods. According to National Bureau of Statistics of China, the total retail sales reached CNY18,391. 9 billion (approximately $2,841. billion) in 2011, representing a year-on-year nominal growth rate of 17. 1%. Fur ther, concord to industr y estimates, the countr ys total retail sales are expected to increase from approximately CNY20 trillion ($3 trillion) in 2012 to approximately CNY26 trillion ($4 trillion) in 2016, representing an increase of about 30%. Strong Marks and Spencer Group plc MarketLine Page 22 Marks and Spencer Group plc SWOT Analysis primal economic trends, population growth and the increasing wealth of individuals are key factors that contribute to the retail market expansion in China.The retail diligence in India is large owing to a large population and is set to grow as several factors contribute. According to the industry sources, the retail sales in India are forecast to grow from around $411 billion in 2011 to $804 billion by 2015. The key factors behind the forecast growth include strong underlying economic growth, population expansion, increasing wealth of individuals and the rapid construction of organized retail infrastructure. Also, as middle and upper class consumer base expands, there will also be oppor tunities in Indias second and third-tier cities.The greater availability of personal credit and a growing vehicle population are to improve mobility which will also contribute to a trend towards retail sales growth. M is strengthening presence in India and China as par t of its geographic expansion and f or some time to come, these countries would be the key contributors to the companys international expansion strategies. The company in with par tnership with Reliance Retail, an established retailer in India, can rap into this lucrative market while expansion in China also continues. Indian and Chinese markets would provide a huge potential revenue base for M&S.Threats Surge in shoplifting losses costs the retailers and customers The UK retailers are exposed to increased costs of shoplifting. Shoplifting has assumed monolithic propor tions in recent times. According to industry estimates, retail crime costed UK stores ? 1. 4 billion ($2. 2 billion) in 2011. There are about two million thefts per year, which concludes to an average of more than one per minute. According to another industr y repor t, the thefts across the UK stores increased from ? 4. 2 million ($6. 5 million) in 2009 to ? 5. 1 million ($7. 9 million) in 2011, an increase of 20%.Long-term trends also show the figure is likely to continue rising. As a result, retailers have been increasing their surveillance spend. This is increasing the costs for retailers as well as for the end consumers. The shoplifting losses are adding to the costs for the retailers and the customers have also been burster the brunt. The surge in shoplifting could negatively impact the cost structure for M&S as well. Weak consumer spending in the UK The UK market is suffering from weak consumer spending. The European debt crisis added more downward pressure to the growth prospects of the UK.According to Eurostat, the UK economy grew by 0. 7% in 2011 and is expected to grow by 0. 5% in 2012. In addition, the UK has witnessed high unemployment rate. According to the Office of National Statistics, the unemployment rate for the three months period November 2011 to January 2012 was 8. 4% with 2. 67 million inert people in the UK. Increasing unemployment rate is expected to fur ther put pressure on the economy of the UK. High i nflation, led by the increase in VAT to 20% and public spending cuts reduced liquid Marks and Spencer Group plc MarketLine Page 23 Marks and Spencer Group plc SWOT Analysis income, leading to a fall in consumer spending on discretionary items. Consumers have been cautious with their spending especially due to rarified petrol prices, tax increases and uncer tainty over jobs. The UK is the key market for M&S. In FY2011, the UK accounted for 89. 7% of M&S total revenues. Thus, the sluggish consumer spending and high unemployment rate in the UK could affect most of the non-food retailers and lead to reduced sales volume or shrinking profit margins. Rising labor cost in the UKLabor costs are rising in the UK. In recent times, tight fitting labor markets, increased over time, government mandated increases in tokenish payoff and a higher propor tion of full-time employees are resulting in an increase in labor costs, which could materially impact the companys results of operation. The National Minimum Wage (NMW) Regulations came into wad in 1999 and since then the NMW rates have been increased annually. The national minimum wage increased from ? 5. 93 per second ($9. 23 per hour) in October 2010 to ? 6. 08 per hour ($9. 46 per hour) in October 2011.Fur ther, the national minimum wage is expected to increase to ? 6. 19 per hour (9. 63 per hour) from October 2012. In FY2011, M&S active 78,169 people. Increasing labor costs can adversely affect the companys operating costs as its wage bills would escalate. This, in turn, could impact its margins adversely. Marks and Spencer Group plc MarketLine Page 24 Marks and Spencer Group plc Top Competitors TOP COMPETITORS The following companies are the major competitors of Marks and Spencer Group plc ASDA Group Limited Debenhams plc H & M Hennes & Mauritz AB J Sainsbury plcNEXT plc Selfridges plc Tesco PLC Gap, Inc. , The French Connection Group Plc House of Fraser Group Plc John Lewis Par tnership plc Arcadia Group Limit ed Home Retail Group Plc Marks and Spencer Group plc MarketLine Page 25 Marks and Spencer Group plc Company View COMPANY VIEW A statement by Rober t Swannell, the Chairman of the Board at Marks and Spencer Group, is given below. The statement has been taken from the companys Annual Repor t for FY2011. I looking ver y privileged to be Chairman of this unique company and at such an exciting time in our evolution.Since joining Marks & Spencer in October and assuming the role of Chairman in Januar y, I have spent much of my time getting to know the business better skirmish our employees, shareholders, customers and suppliers. I first became deeply involved with M during the unsolicited putsch attempt in 2004, when I led the advisory team that helped put the M case to its shareholders. It was then I learned first hand about this unique company about the extraordinarily strong human relationship it has with its many stakeholders and about its very special ethos.This ethos is a reflec tion of the high standards our customers expect from M trusting us not only to deliver great value, great quality products but also to do the objurgate thing socially, environmentally and ethically. We know that putting Plan A at the hear t of how we do business is not just the right thing to do it is also fundamental to our long-term success. Performance In a challenging marketplace M has continued to grow, with underlying win up 12. 9% on the year.We delivered this by staying true to our heritage of quality and innovation, reminding our customers what makes M special. This year Marc Bolland set out a clear medium-term plan for the business, after extensive discussions with colleagues and us, the Board. This is covered in detail in Marcs review. From day one, I have been struck by the passion and commitment of our people. I am delighted that this year we are paying a bonus to all employees to thank them for their energy and enthusiasm in what has been a difficult trading enviro nment. DividendWe are committed to delivering consistent returns for our shareholders. To this end we have adopted a progressive dividend policy, with dividends broadly covered twice by earnings. We intend to pay a final dividend of 10. 8p per share (last year 9. 5p) in respect of the 2010/11 financial year. Governance Marks and Spencer Group plc MarketLine Page 26 Marks and Spencer Group plc Company View This year we returned to the traditionalistic governance structure of a separate Chairman and Chief Executive, providing limpidity between Marc Bolland and me, with regard to our respective roles.Put simply, I run the Board and Marc runs the business. The Board has a wide range of responsibilities. There are three that I think are par ticularly impor tant for the success of the business first, to debate and comply our strategy and hold the executive team accountable for its execution second, to batten down that we have the most talented team to execute this strategy and that we plan effectively for succession and third, to set the tone for governance, which is par ticularly impor tant at M where doing the right thing is an integral par t of our ethos. My ob is to ensure the Board has the right mix of skills and talents and to ensure that it works effectively as a team towards shared goals with the right mix of enquir y and suppor t of the executive directors from the non-executive directors. During the year we commissioned a formal Board military rank from an independent consultant, the findings of which are outlined in the Governance section. This process highlighted the real enthusiasm of the directors in suppor ting a shared ambition to guide M to the ver y best future. We know that you expect high standards from M its our responsibility to learn how we can improve.This review was an impor tant par t of that journey. As stated in our 2009/10 Annual Repor t, we reviewed the senior net structure this year. Following extensive shareholder consultation, we believe we now have a framework that is both relevant to todays M and fully aligned with our strategy. The Board Over the last year the Board has been strengthened by a series of executive appointments. In May 2010 Marc Bolland joined the business as Chief Executive, assuming the day-to-day test of the business from Sir Stuar t Rose in July.In October Alan Stewar t joined as Chief Finance Officer and in February we announced the appointment of Laura Wade-Gery as Executive Director, Multi-channel E-commerce she will join the Board in July. Whilst the Board features some new faces, these changes have taken place around a core of executive and non-executive directors that has hang oned stable over recent years. I would like to pay par ticular tribute to Sir Stuar t Rose. When he became Chief Executive in 2004, M was at a low ebb.He restored confidence in M, re-established its determine and built a strong business. The solid platform from which Marc is now implementing his plan is a credit to Stuar ts energy and tireless commitment to M over the last seven years. The smooth management modulation the meticulous handover to me and the suppor t of Marc is also a credit to Stuar t. In that connection, I would also like to thank Sir David Michels, and the Nominations & Governance Committee he led, for managing a change of leadership over the past year that was accomplished piano and effectively.David has decided to step down from the Board at the end of his second term in February 2012, but I am delighted that he will continue his role as Deputy Chairman until then. Marks and Spencer Group plc MarketLine Page 27 Marks and Spencer Group plc Company View I must also thank Louise Patten for the significant share she has made over the last five years, playing an impor tant role in each of our Board Committees. As Louise reaches the end of her second three year term on the Board, she has decided not to seek re-election at the future AGM. Looking aheadOur priori ties for the year ahead are clear. We have a plan and it is now our collective job to make it happen. The Board will concentrate on delivering exemplary governance at the highest level to enable our executive team to drive this strategy forward. The economy still gives us undercoat to be cautious. Yet in difficult times, our core values of Quality, Value, Ser vice, invention and Trust matter more than ever to M customers. These values remain at the hear t of our strategy and I therefore look forward to the future with confidence. Marks and Spencer Group plc MarketLinePage 28 Marks and Spencer Group plc Locations and Subsidiaries LOCATIONS AND SUBSIDIARIES Head Office Marks and Spencer Group plc Waterside House 35 Nor th Wharf Road London W2 1NW GBR P44 20 7935 4422 http//www. marksandspencer. com Other Locations and Subsidiaries Marks and Spencer International Holdings Limited Great Britain GBR Marks and Spencer (Nederland) BV NLD Marks and Spencer (Ireland) Limited IRL Marks and Spencer (Asia Pacific) Limited HKG Marks and Spencer Simply Foods Limited Great Britain GBR Marks and Spencer Marinopoulos Greece SA GRC Marks and Spencer SCM Limited