Marks & Spencer has parted ways with former fashion boss Jill McDonald after less than two years. Retail Week looks at what the retailer can do to turn its flagging fashion brand around.

Last week, the hammer came down on Jill McDonald’s time after a less-than-two-year stint as managing director of clothing and home at Marks & Spencer.

She joined the retailer in October 2017 from cycling and motor accessories specialist Halfords, where she had been chief executive.

She would bring, M&S said then, “first-class customer knowledge and great experience in running dynamic, high-achieving teams” that made her “exactly the right person to lead this all-important part of our business from recovery into growth”. Despite the high hopes – and McDonald is highly regarded – success eluded her, as it had done her predecessors.

“It appears that these are longstanding problems… I just find it quite puzzling that M&S can’t sort out their demand problems”

Maureen Hinton, GlobalData

During her tenure, clothing sales fell. They were down 3.6% last year when like for likes slipped 1.6%. At last week’s AGM, M&S chief executive Steve Rowe lamented “the worst availability in casual clothes I have ever seen in my life” after jeans promoted by TV presenter Holly Willoughby sold out, leaving many would-be buyers disappointed.

Despite this Rowe was effusive in his praise of McDonald in a statement on her departure. He said McDonald “recruited a talented team, improved the quality and style of product, and set a clear direction for the business to attract a younger family-age customer”.

Rowe went on to say M&S “now needs to move on at pace to address longstanding issues in clothing and home supply chain around availability and flow of product” and he would, for the time being at least, “be overseeing this programme directly”. 

M&S is now looking for its fourth fashion boss in five years and, as the retailer undergoes a radical transformation, the question is what it can do to turn its perennially problematic fashion business around?

What happens now?

A source close to M&S says McDonald leaves a strong legacy, having helped its clothing and home business establish itself as a standalone business division, incorporating full P&L accountability and its own marketing functions, and put M&S in a “really good place” from a product perspective.

holly willoughby marks and spencer

Lack of availability of clothing promoted by Holly Willoughby has frustrated customers

However, the source said M&S still has work to do on its supply chain and buying, as the recent difficulties showed.

“The reality is that fashion is a confidence game. Where you’ve had a decade of up-and-down performance, your buying confidence gets eroded. That leads to teams buying wide and backing every horse in the race.

“When you’ve got a really big, broad clothing offer that has a knock-on effect into the supply chain, which slows down, which itself has a knock-on effect on the customer experience.”

However, some industry experts believe M&S’ fashion business needs more work than the retailer would like to admit.

ConsumerCast director Robert Carruthers believes M&S faces “a number of strategic issues” such as an insufficient focus on core customers, a relatively small online reach and a bureaucratic structure that prevents it from being agile in response to changing fashion trends.

“Naturally any brand over time will age. There’s always a constant pressure on a brand to reinvent itself on a consistent basis. M&S is clearly struggling with that now. It’s always been a ‘broad church’ in terms of its customer base,” he adds.

“It’s such a big business that covers so many bases that it’s hard for them to be nimble and to back winners when it comes to fashion trends. M&S is famously bureaucratic in its procedures and that lack of agility – if it’s looking to try and chase fashion trends – is really a fundamental problem”.

Group retail research director at GlobalData Maureen Hinton agrees. She says she finds it “puzzling” that M&S has such issues with its supply chain and availability, and says if Rowe believes it has been such a long-running problem, why hasn’t it been fixed before?

“It appears that these are longstanding problems and they should have sorted them out now. I just find it quite puzzling that they can’t sort out their demand problems.”

Attracting a “younger family-aged consumer” is clearly a focus for M&S. To that end, it recently confirmed the appointment of Topshop fashion director Maddy Evans in a bid to revive flagging sales.

Yet, as Carruthers points out, ConsumerCast has found fashion and footwear spend is only growing in older demographics.

Can it turn around?

When McDonald was appointed, her record on smart use of customer data, as well as her experience of running “high-achieving teams” in her roles at Halfords and McDonald’s, was praised.

A source close to M&S says McDonald played a key role in helping inform the retailer’s wider transformation strategy, as part of which the retailer is seeking to close 110 of its clothing and home stores over four years.

The source says: “The reshaping of the store estate is being driven by the shift in how people are shopping. M&S has a target to get clothes sales to a third online by 2022 and that’s progressing. M&S is determined not to call it a victory without first addressing the things which have been longstanding drags on the business – particularly around poor availability.”

“M&S should be focusing on regaining profitability, in a more focused business that does its job well and doesn’t try to be a jack-of-all-trades”

Robert Carruthers, ConsumerCast

The source says that M&S is looking at using its “market-leading back-to-school range” as the gateway to this new core customer base and setting up its stores and ecommerce offerings more to reflect “how they want to shop”.

One experienced senior fashion retailer says M&S could do well, however, to think less about demographics in terms of age, and more on demographics in terms of attitudes towards the clothes it sells. 

Hinton says while this focus works in theory, it is in competition with retailers such as Next – which has better ecommerce channels, as well as a broader offering in terms of external brands and has consistently done well in recent years.

On whether M&S can turn its fashion business around, Hinton says it will need someone who “really understands clothing and the supply chain and can get in there and quickly sort the problem out”.

However, she says it will not be a quick fix.

“It’s not something you can just do overnight. It’s not going to be something that you can change one week to the next. It would likely take at least one good season before they get back on track.”

Carruthers says: “I think they should be focusing on regaining profitability, in a more focused business that does its job well and doesn’t try to be a jack-of-all-trades.”

M&S’ house broker is realistic when it comes to the work needed to turn around the department store chain’s fashion business. As Shore Capital says: “The work that M&S is undertaking has to have a positive impact upon operating profits and free cash flow at the end of the day.”

Only then “when visibility as to an improving trend in these areas comes through” will investors respond positively, and a chance at fashion success will once again be in M&S’ grasp.