By Kristy Dorsey

Marks & Spencer has said it will use its experience of the Covid-19 crisis to rapidly overhaul its operations in preparation for a new retailing landscape.

Releasing its results for the year to March 28, the store chain outlined details of its “Never the Same Again” agenda. This will involve cutting back on elaborate management structures, increased multi-tasking by staff, and better integration of its online business to compete more effectively with “pure play” internet retailers.

This newest initiative follows years of efforts to turn the tanker at Marks & Spencer, which has struggled to keep its existing customers happy while also appealing to a younger breed of shopper. Chief executive Steve Rowe said he is now “determined” to capture the benefits of changes that have been forced by the pandemic on a business with a history of slow cultural change.

“Whilst some customer habits will return to normal others have changed forever, the trend towards digital has been accelerated and changes to the shape of the high street brought forward,” Mr Rose said.

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“Most importantly working habits have been transformed and we have discovered we can work in a faster, leaner and more effective way. I am determined to act now to capture this and deliver a renewed, more agile business in a world that will never be the same again.”

Mr Rowe added that the financial year to the end of March now seems “like ancient history”. During the period, M&S made a pre-tax profit of £67.2 million, down from £84.2m the previous year.

That included £336m of one-off costs, including about £213m of stock write-downs and other costs related to the pandemic.

Clothing sales have slumped by 75% during the UK lockdown, with M&S now sitting on £500m of spring and summer fashions that it will struggle to shift. The company did manage in April to cancel £100m worth of late-summer stock, but has ordered £560m worth of autumn/winter fashions that may also prove difficult to sell if consumer spending remains under pressure after lockdown restrictions are removed.

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About £400m of the summer stock is clothing basics such as t-shirts and office wear which can be held until next year. M&S will also be able to store a further £200m of unsold seasonal items till next spring.

Much of the “Never the Same Again” strategy is focused on the tie-up with Ocado, which was sealed last year when M&S paid £750m for half of the online grocer’s UK business. From September, Ocado will begin selling M&S products alongside it own, and will cease to carry lines from current partner Waitrose.

Approximately 6,000 M&S lines will be added to the Ocado food range in time for the switch-over in September, as well as 1,600 clothing and home products. The new M&S autumn range will be launched in September with 850 of those lines available online.

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“We have been working closely with Ocado Retail to create a ‘one business’ mentality which includes common operating procedures, business plan and shared talent,” the company said. “Switch-over and synergy plans are on track.”

Food was an out-performer during the last financial year, with increased sales even before Covid-19. Operating profit was 11.2% higher before adjustments.

The Ocado deal generated £2.6m of profits during the seven months to March. September’s switch-over is expected to drive further volume growth for M&S Food.

There was no further update on the retailer’s plans to close or relocate about 100 of its 1,000 UK outlets as part of a five-year programme first announced in 2016. Marks & Spencer’s Scottish estate currently consists of 22 “shared space” stores selling both food and general merchandise, 35 food stores and 4 outlets dedicated to clothing and home wares.