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The Misstep That’s Threatening to Topple Marks & Spencer

Throughout the 20th century, Marks & Spencer epitomized a certain type of Britishness. Sensible, well-cut clothes for the middle-aged and the middle classes. From underwear to a nice new coat via a well-made shirt and a sturdy pair of winter boots, M&S has provided the clothing staples for much of the British population for nearly 115 years. And they have exported this successful formula of dependable fashion and high-end supermarket goods to countries as far afield as Hong Kong, Singapore and Bermuda.

However, earlier this year the stalwart, which was once a staple on every British high street, announced it was closing 100 stores. This is one third of their U.K. retail space, and it will be followed by a further 351 redundancies later this year. This mass closure was in response to a steep fall in annual profits, as well as a bill of 514.1 million pounds ($674 million) for restructuring the business. The retailer has since become the U.K.’s fourth most shorted stock, with 11.7% of its shares in the hands of hedge funds.

Other British retailers that sell clothing alongside food include Sainsbury’s and Tesco’s, both of which have also seen their fashion profits fall as online shopping changes shape of the market—but neither of them has failed to adapt to the same extent as M&S.

There are a number of reasons behind M&S’ particularly vertigo-inducing fall from grace. One factor is that their stores are not particularly tempting. In an era where people need to have a reason to leave their laptops and venture into the real world of brick and mortar shopping, M&S has failed to give them one.

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After more than a century on the high street, M&S has a wide array of smaller outlets that look far shabbier and more dated than similar high street brands at the same price point—the lighting is often too bright, and clothing and food are cramped together in close quarters. Meanwhile many of the larger stores are now difficult to navigate—and while the advent of coffee shops and personal shoppers has helped, customers are still being lured to jazzy department stores over M&S, or simply shopping from their desks.

About a quarter of fashion and footwear is now bought online in the U.K., according to a report by GlobalData. As people trust online shopping more and more, brands such as Asos and Boden are replacing the traditional high street for affordable staples. M&S has made a massive investment in an automated home delivery warehouse, but it has struggled to cope with demand and is notorious for delayed deliveries.

However, arguably the most important factor in M&S’s dramatic drop in share prices was due to a choice made in its very own boardrooms. For decades M&S marketed basics such as underwear and T-shirts to the entire population, but its fashion lines traditionally appealed to middle-aged and older women. However, as the lines started blurring between how women in different age groups should dress, M&S lost focus of who its traditional customer was.

“For some, reason and I have never understood this rationale, the strategy changed,” said Phyllis Walters, head of one of the U.K.’s top fashion public relations agencies. “M&S, from being the biggest name on the high street, decided to join the fray and chase the youth, but that never works. What daughter whose mother shops at M&S for fashion is going to follow them blindly?”

“This meant they said goodbye to their existing client by introducing obviously youthful lines,” she continued. “And as anyone in marketing knows, don’t tell a loyal, existing client that you don’t want them until you are damn sure that you have established a new customer base.”

Walk into any M&S and you will feel the effects of this new repositioning. While the food halls are still busy, the fashion departments are filled with racks of brightly colored clothing—but are also noticeably empty of customers. Oxford Street in the summer throngs enough people to make walking a battle, and queues for the fitting rooms snake around the shop floor at Topshop and Primark. And yet M&S remains a quiet and almost serene place to visit.

It’s clear to me that they don’t appear to know who they are targeting and why,” Walters said. “The grey pound has huge power in the U.K. So why chase the twenty-somethings when you have a lucrative customer base just sitting there?”

Walters, it seems, has an answer to her own question. “It’s arrogance,” she said. “Thirty years ago, they were the most successful retailer in this country, making a billion or so each year, so they were overly confident. Also, most boardrooms of fashion retailers are filled with men, who might not have the foresight to realize that attempting to attract the youth would alienate everyone else.”

At this stage, it will be difficult for M&S to laboriously climb back to its previous position at the top of the high street totem pole. Its food halls do, however, remain popular, and 30 percent of the British public buys their underwear at good old Marks and Sparks. But until the company has worked out who their target audience is and what that customer aspires to, the sight of a boarded-up M&S may become a familiar sight on the British high street.