In January 2008, Jeremy Paxman wrote an angry letter to then Marks and Spencer boss Sir Stuart Rose about the state of his pants. They were letting him down. The Newsnight presenter said: “I’ve noticed that something very troubling has happened. There’s no other way to put this. The pants no longer provide adequate support. When I’ve discussed this with friends and acquaintances it has revealed widespread gusset anxiety.”
This was funny, but Paxman meant it. His complaint resonated with large sections of the population who had grown up thinking of M&S as a staple of the high street and had lately found it disappointing.
Certainly, the gap between the glamorous adverts, often starring Twiggy, and the in-store experience was huge.
The feeling in the City, and among customers, was that M&S — part of British life since 1884 — was complacent. Chief executives came and went and either decided the problems were too big to fix or simply didn’t notice them in the first place. They took their share options and moved on.
Only when Archie Norman, the former MP and chief executive of Asda, arrived as chairman in 2017 was there any sense of urgency.
Like alcoholics in denial, M&S’s first big step was to admit to the size of the problem. Systems were clunky, the stores unappealing. The food was okay, but the clothes had been dowdy for years. The typical 60-year-old M&S woman no longer saw herself as old and didn’t care for the frumpy dresses on offer. Complaints about M&S bras were common. They just didn’t fit.
One insider admits: “No one wanted to be open about the things that were bad, to fix the basics, to face the unvarnished truth.”
After a recovery period of nearly 30 years in the making, M&S this week reported a 58 per cent leap in annual profits
Earlier this week, after a recovery period of nearly 30 years in the making, M&S reported a 58 per cent leap in annual profits to £716 million on sales of more than £13 billion.
The City is talking of future profits of £1 billion, an amount M&S has reached only twice before in its history, under Sir Richard Greenbury in 1997, and Sir Stuart, now Lord Rose, a decade later.
What has changed? For a start staff were made to feel part of the business again. Chief executive Steve Rowe and chairman Norman decided the management were detached from the stores and therefore the customer.
New chief executive Stuart Machin, who replaced Rowe in 2022, has a Straight to Stuart scheme, which means any member of staff can go directly to him with an idea.
One staff member said: “There were 12,000 of those in the last year, usually store colleagues saying, why are we doing this? Why aren’t we doing that? Everyone feels they have a voice.”
Another added: “There is a mindset shift — let’s not cover things up, let’s talk about them.”
All colleagues have to spend seven days a year working in a store as part of their review process.
The City, rather than worrying about gusset support, is now positively gushing.
Mark Crouch at investment platform eToro, says: “Marks and Spencer’s results make for dazzling reading. In what has become one of the most emphatic turnarounds seen in British retail in recent years, the M&S comeback story is turning into something of a fairytale for investors. Shares are up over 50 per cent in the last 12 months as the business maintains the trend of attracting new customers and accelerating growth.”
Kathleen Brooks, research director at broker XTB, said: “Typically, M&S has done well with its food products and struggled with clothing and homeware. However, a shift has happened at M&S in recent months.
“Its fashion offering (for women at least) has gone off the charts, tailoring is good quality for a decent price, and the style of its ranges can also compete with the higher-end ‘affordable luxury’ brands for sale elsewhere. It has not only made M&S a go-to for the fashion conscious, but it has also accumulated multiple brands that are attracting new customers.”
Ten years ago, it didn’t look like M&S had much of a future. It would sell lunchtime sandwiches and boring shirts to office workers. Instead, the product overhaul has been huge.
It again looks like one of the kings of retail, which must be good for the whole of the high street. If shopping in M&S is a pleasure once more, maybe people will try the stores either side of it too.
M&S as saviour of the high street seemed a very unlikely idea until just now. Paxman’s gusset anxiety is over.
