This week we gained more insight into how some of the high street’s biggest names are refocusing their strategies to tackle ongoing trading headwinds.
New Look’s half-year revenue dropped 4.2%, but it managed to almost double its EBITDA to £49.8m, largely through cost savings.
Both M&S and New Look have been closing stores in an attempt to streamline their store portfolios and embrace multichannel consumer shopping habits. New Look has also looked at its international portfolio and recently announced that it will withdraw from China, closing 120 stores.
M&S has shouted about its investment in digital. It has partnered with several technology companies – including Microsoft, Founders Factory, Decoded and True – to provide training to staff and build a digitally innovative culture. It has hired a new chief digital and data officer, Jeremy Pee, to lead its digital business strategy.
There are more tough decisions ahead. However, a streamlined strategy that embraces innovation will set a business up to be fit for the future
However, Primark has taken the opposite tack. It has increased its selling space in the UK and plans to open more stores globally over the next 12 months.
Primark shows that brands must stay true to their strategy and not necessarily follow the pack. Although there has long been speculation that the retailer would get left behind without a transactional website in its armory, it has remained true to its proposition and, as the results show, customers remain loyal.
Faced with the stark reality of what happens to retailers when they don’t adapt to changing shopping behaviours, the bellwethers of the high street are going over their strategies and structures with a fine-tooth comb, and taking much-needed steps to modernise.
There are more tough decisions ahead. However, a streamlined strategy that embraces innovation will set a business up to be fit for the future. Those that leave it too late may risk getting left behind.