There are many serious business questions to ask Stuart Machin, the chief executive of Marks & Spencer. As the man in charge of restoring the fortunes of the UK’s best-loved retailer, a weighty responsibility to the nation’s shoppers and his army of small shareholders lies on his shoulders.
Before we get to that, though, I want to know about Joan Collins. He is friendly with Dame Joan, a fact that emerged when she was hit by a masked cyclist en route to a dinner with Machin, actor Christopher Biggins and several other pals at Rules restaurant in Covent Garden.
He says: ‘She is an icon… and she is so proudly British. I love her whole style.’
The actress, he says, is a ‘huge fan’ of M&S and visits her local store regularly when she is in the UK. She sends WhatsApps with pictures of her trolley and writes that ‘she is keeping me going’. He calls her ‘an absolute star and legend’.
Machin, who has just completed his first year as chief executive, is one of M&S’s best customers. He is the company’s third biggest buyer of menswear. The identity of the top two remains a mystery.
Road to recovery: Stuart Machin took over at Marks & Spencer last year
More importantly, millions of ordinary customers are buying more.
The City loved Machin’s first set of annual results. Pretax profits were up by more than a fifth to £476 million, sales of food were nearly 9 per cent higher and there was an 11.5 per cent increase in clothing and homeware sales.
Machin is a big supporter of the Mail’s ‘Scrap the Tourist Tax’ campaign. ‘Tourists would come here knowing they would get their VAT-free shopping, not just in London but across the UK. We are asked about it all the time by tourists in our Marble Arch store.’
Speaking of which, he is unrepentant in the face of critics of his plan to redevelop the flagship shop. Levelling Up Secretary Michael Gove called in the proposal to demolish and rebuild the store, known as ‘The Arch’. He has delayed his decision for three months. It is due in July.
‘It is energy inefficient,’ he says. ‘We are spending a fortune on maintenance and it is on the verge of being damaging for our brand.
‘No amount of money will fix that store in its current state. The only option is a complete rebuild.
‘It could be the most amazing store in the most amazing destination. But it is very hard when you can’t get a decision.’
If his plans to rebuild are rejected, he will move M&S out of Marble Arch after 93 years. ‘If this doesn’t work, I can’t see an option,’ he says.
To the relief of long-suffering small investors, M&S shares have risen almost 20 per cent this year, however there is still a lot of ground to make up. M&S was kicked out of the elite FTSE 100 in 2019 and shares are still way below the £4.00 offered by Sir Philip Green in a takeover bid nearly two decades ago. Dare we hope that the elusive M&S recovery is finally a reality?
‘I don’t think we will ever declare victory, definitely not under my leadership,’ says Machin. ‘There are always more challenges. We can go from hero to zero and back again very quickly. I want sustainable growth.’
One fly in the ointment is Ocado Retail. In 2019, M&S paid £750 million for a 50 per cent share in a joint venture with Ocado Group to supply its products online.
But sales at the division were down by 1.2 per cent and M&S’s share of its net loss was nearly £30 million. He says he wants it to be in positive territory in the next two to three years.
‘We wouldn’t have had any other choice about going online. We couldn’t do it ourselves and we couldn’t do a store pick model as we have too many small shops.’
Hannah Gibson has been running the Ocado Retail division since September. Machin says: ‘She is really focused on the customer, on service, on the new platform, web dev- elopment and how that is going to transform in the next 12 months. She is very focused on value. Four hundred more lines have gone on.’
Inflation has been a major bugbear, with a £50 million increase in energy costs. And £100 million was added to the wages bill last year.
M&S has taken a hit to profit margins in order to soften the blow to consumers. A programme to save £400 million of costs over five years is under way.
Machin points to the fact that M&S bought Gist, its logistics provider, last year, in a move that will reduce costs and give it more control over the supply chain. ‘We have already had £25 million of benefit,’ he says. On the fashion side, M&S has successfully introduced brands from outside – including Sosandar, Hobbs, Nobody’s Child and Seasalt – with more in the pipeline. Its decision to close down some of its high street branches has caused distress in some local communities. Closures, he says, are only part of the story. M&S is investing about £500 million in a ‘store rotation programme’.
As well as shutting 67 ‘low productivity’ outlets, the plan is to have 180 full-line shops and to open more than 100 new food halls by April 2026. The idea is to grow through ‘omni-channel’ shopping, where the bricks-and-mortar stores work in harmony with the online business, so customers can buy whenever and however they wish.
‘We should really have had a property strategy 20 years ago,’ Machin says. ‘The competition has really good stores and we have an ageing estate. You could argue we should close a few more quickly.’
Before joining M&S, Machin worked at Sainsbury’s, Tesco and Asda, and spent a decade in Australia. He was the managing director of Target, a subsidiary of the Aussie conglomerate Wesfarmers, but resigned in 2016 after an accounting probe. He was, he said, unaware of the issues, but accepted a share of responsibility as they happened on his watch.
He was appointed as managing director of M&S’s food business two years later, then made co-chief executive last year with Katie Bickerstaffe, in an arrangement that raised eyebrows. ‘It’s working well with Katie,’ he says.
‘In the first few weeks it wasn’t overly clear because we were both in new jobs, but we bounce off each other. Katie is a fantastic partner. She is a very strong number two.’ As a youngster, he wanted to teach religious education, but he caught the retail bug from part-time jobs in his teens. ‘Work is probably my hobby,’ he says. ‘It has always defined me. I enjoyed the Eurovision song contest in Liverpool, but I did four stores on the way.’
Machin has a likeable demeanour, but it’s clear there is a steely side underneath – and that he is relentlessly in pursuit of improvement.
‘I have a healthy paranoia,’ he says. ‘Everyone knows I ruffle a few feathers. They all know what I am like.’ He personally tries out the recipes for M&S from top chef Tom Kerridge to see whether the ingredients are all available and how easy they are to make. ‘I like to cook the recipe and time myself to see how long it takes,’ he says. He emails Kathryn Turner, the director of product development, at least once a day with his observations. Machin is ‘obsessed with shrinkflation’. He says: ‘I measure everything. Naming no names, some big brands charge the same price for a smaller product – but we don’t.
‘I thought our Turkish Delight bar had got smaller, but everyone assures me it hasn’t. ‘I complained recently because I thought the lettuce wasn’t crunchy enough.
‘Everything new, I buy it immediately to eat.’ He tests every new food product personally and makes his feelings known if they don’t pass muster. He adds: ‘I call that protecting the magic.’
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