At £2.2bn, its market capitalisation is now smaller than that of furnishing specialist Dunelm or discounter B&M. M&S talks of the need to “deliver three years’ change in one”, and its “streamlining” today is undoubtedly an acceleration of plans that boss Steve Rowe and chairman Archie Norman have been contemplating for a while.
Cherished name though it is, you wouldn’t invent a business like M&S today. Marrying department stores with expensive food halls in large retail stores makes little sense. The two arms of the business are straining at the leash to be set free, but it is hard to see how M&S can easily or logically break up its stores without simply handing back leases. Last year it announced 110 shops were for the chop; 56 of these have actually closed, and it seems inevitable that more will follow, though M&S says it will still open new stores or relocate them where it is sensible to do so.
It’s not all doom and gloom: M&S’s £750m deal to buy half of Ocado’s retail business is looking better and better by the day. Analysts questioned whether the retailer was paying over the odds at the time, but now it has a toehold in a substantial, growing operation at a time when online grocery has suddenly boomed (even M&S can’t be unlucky all of the time). Some 5,000 M&S food products, some of them repackaged to suit family shoppers, will go live on Ocado from September 1, alongside 800 bestselling clothing items.