Can M&S reinvent itself at a time when the High Street is suffering its worst crisis in living memory?
That is the question looming over the retail chain when it this week presents its latest numbers to the City.
‘Our M&S’ has a special status in our hearts and affections. It’s a repository of memories, as the place millions of us visited with our parents for milestone purchases such as a school uniform or as young adults for a first formal suit. But this hasn’t prevented the chain suffering from the same brutal forces as the rest of the retail sector, including the rise of online shopping and the iniquitous business rates regime.
Repository of memories: ‘Our M&S’ has a special status in our hearts and affections
M&S has a business rates bill of about £200m, compared with around £14m for Amazon on its 14 warehouses in England and Wales, and though the Budget was a great step forward in helping small firms, it hasn’t answered the problems of larger chains.
M&S is also dragging an enormous ball and chain in the shape of scores of stores in the wrong places, clunky old computer systems and other baggage that puts it at a disadvantage to newer, nimbler competitors.
A long line of bosses have already tried to revive the chain with no joy. Will the current top duo, chairman Archie Norman and chief executive Steve Rowe, succeed where they have failed?
The figures this week will not be pretty, because the pair are in the early throes of their overhaul, when some of the most painful actions are being taken. The company is very much in the treatment phase, with a fair way to go before recovery can begin. But there are reasons to believe Rowe and Norman might fare better than their predecessors.
Norman, in the early 1990s, made his name by transforming Asda and went on to do a brilliant job at ITV. Rowe is an M&S lifer, who has worked at the retailer man and boy and would, if cut open, have the company logo engraved on his heart.
One big difference this time is that both seem free of the corporate arrogance that previously afflicted M&S and acknowledge that the culture must change.
The 100 store closures indicated so far are unlikely to be the end of it – M&S will have a slimmer portfolio of stores in future and there will be heavier investment in the online offering, which after high outlay is still not up to snuff.
There is also big investment in bringing digital technology into the stores through a strategic partnership with Microsoft. Innovations are likely to include checkout-free shopping and technology that will allow customers to see what they look like in an outfit from every angle.
The company is at serious risk of relegation from the FTSE100. That would be a huge blow to its pride, would upset its small investors who still account for a significant proportion of the register, and would compel some investment funds to sell.
To put its current standing in perspective, the market value of M&S is about £4.9 billion. That is way behind Next, at nearly £8 billion, and on a par with online fashion retailer Asos, whose market value is around £4.7 billion.
The fact that old bruiser Sir Philip Green has been in the news again is a reminder it could have been worse.
The Topshop tycoon came perilously close to taking over the chain in 2004, and, if he had, it might have gone the way of BHS.
Still, M&S shares are a pound lower than his bid of 400p a decade ago and have fallen 8 per cent this year. Rowe and Norman will need all their acumen, and a large dollop of luck.