Speculation was mounting that M& S’ Simply Food format could be ditched as new chief executive Stuart Rose embarked on a review of the business.
M& S would continue to open new Simply Food stores in the coming weeks, but the format was under review, said Rose.
“We don’t have a downer on Simply Food and we will keep opening the stores we have committed to. But like everything else in the business, we have it on check.”
His comments came as Maurice Helfgott, who has been executive director, food, for the past six months, was moved into a new role in clothing.
M&S has committed to opening 500,000 sq ft of new
standalone food space by 2005/6, some of which will be delivered through a joint venture with Compass, which already has 16 Simply Food franchise sites set up.
However, Credit Suisse First Boston analyst Tony Shiret said M&S had struggled to find a profitable formula for standalone food sites, and that fixed costs remained too high.
He said: “Roger Holmes was never going to admit it wasn’t working - he has been championing convenience all the way. But I think Simply Food could well be dropped.”
Teather & Greenwood analyst Dave Stoddart said it was difficult to assess the performance of the 62 Simply Food outlets and 36 larger standalone food only stores as M&S did not break down food results by format.
However, both Rose and Philip Green had hinted they were reluctant to throw more money at Simply Food when all available firepower should be targeted at womenswear.
Neither party would be keen to pump cash into a format that wouldn’t make a significant contribution to profits until it had reached critical mass, he added.
>>p16 Movers & Shakers
Elaine Watson
M& S would continue to open new Simply Food stores in the coming weeks, but the format was under review, said Rose.
“We don’t have a downer on Simply Food and we will keep opening the stores we have committed to. But like everything else in the business, we have it on check.”
His comments came as Maurice Helfgott, who has been executive director, food, for the past six months, was moved into a new role in clothing.
M&S has committed to opening 500,000 sq ft of new
standalone food space by 2005/6, some of which will be delivered through a joint venture with Compass, which already has 16 Simply Food franchise sites set up.
However, Credit Suisse First Boston analyst Tony Shiret said M&S had struggled to find a profitable formula for standalone food sites, and that fixed costs remained too high.
He said: “Roger Holmes was never going to admit it wasn’t working - he has been championing convenience all the way. But I think Simply Food could well be dropped.”
Teather & Greenwood analyst Dave Stoddart said it was difficult to assess the performance of the 62 Simply Food outlets and 36 larger standalone food only stores as M&S did not break down food results by format.
However, both Rose and Philip Green had hinted they were reluctant to throw more money at Simply Food when all available firepower should be targeted at womenswear.
Neither party would be keen to pump cash into a format that wouldn’t make a significant contribution to profits until it had reached critical mass, he added.
>>p16 Movers & Shakers
Elaine Watson
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