In a world of often flagged managerial excess and multi-million pound salaries and non-performance pay-offs, Simon Wolfson's decision to share his equity bonus with staff again, along with a rise of 37p an hour for Next's lowest paid colleagues, shines as a small but welcome beacon of unexpected leadership. Recognising the success of the business depends on the work of many not the brilliance of one is a refreshing act of humility. Praise the Lord.
Thursday, 20 March 2014
So how are they getting it so right, whilst M&S seem to struggle season to season? The answers may well be focus and passion. Next are a fashion based clothing and homewares business. It's straightforward, uncomplicated, chic-y and commercially rigorous.
M&S by contrast are increasingly an outstanding food retailer that also sells clothes and in fashion and demographic terms it's less hip, more hip-replacement. The way they talk about themselves is loaded with language that sounds dated:
"Over the last 129 years M&S has grown from a single market stall to become an international multi-channel retailer. We now operate in over 50 territories worldwide and employ almost 82,000 people. Remaining true to our founding values of Quality, Value, Service, Innovation and Trust, we work hard to ensure our offer continues to be relevant to our customers. Through diversifying our store locations, channels and product ranges we are reducing our dependence on the UK and broadening our international focus. Our UK turnover is split between Food (54%) and General Merchandise (46%). With 766 stores across the UK and a growing e-commerce business, we sell high-quality, great value food and remain the UK market leaders in womenswear, lingerie and menswear."
The trouble with being the market leading retailer of anything clothing, is your seasonal bets are bigger. You put a new range in 766 stores, and if it doesn't work you have a large headache. This will encourage you to play safe and that will not build fashion creds. More particularly their category focus seems unwieldy and non-specific. To be market leaders of menswear cover a lot of segments, are they leading everywhere? And I might be alone, but isn't it a little odd that lingerie isn't a regarded as part of the womenswear category?
Food on the other hand, has much more fun, flair and flexibility. For all its complexity, it's simpler. You can get in and out of recipes fast and there is a burgeoning list of would be own label food manufacturers who are queued up wanting to work with M&S.
And it is something M&S are rightly passionate about. At 54% of their UK sales, the question arises, when will M&S stop beating themselves up and decide they've reached the end of the clothes line? Like it says on the tin: M&S Simply Food.
Until then, expect more disappointing news from M&S. While they hand out excuses, Lord Wolfson hands back £75m to shareholders, and that's a trifle M&S would love to serve.