Marks & Spencer announce £400m IT investment strategy

Marks & Spencer is to invest £400 million in its IT and supply chain. The retailer is to shift its investment plans away from extending its property portfolio of stores. Announcing its final results for the year 2008 to 2009, the retail chain said in the year 2009 to 2010 it will invest the £400 million in its IT and supply chain infrastructure. Marks & Spencer (M&S) reported a fall in annual profits.

In its final results for the 52 weeks ending on the 28th of March 2009 M&S announced, "We will spend £400m in 2009/10, shifting the focus of our capital expenditure from our property portfolio, where we have made considerable investment over the last three years, to our IT and supply chain infrastructure."

This dramatic shift in management policy follows on from significant IT investments which have been made by the retailer. New tills and point of sale software has been introduced over the last financial year aimed at improving the speed of transactions and reduce the administrative burden on M&S employees.

M&S CIO Daryl Stein is also responsible for the corporations supply chain, which is to receive a new distribution centre in Bradford next year. The Bradford depot will improve the speed of distribution, but M&S is also investing in processes to allow overseas produced goods to be delivered directly to stores, which will reduce export costs and speed up distribution.

IT and supply chain have been at the core of M&S investment over the last two years, in 2008 it overhauled its online retail offering and in 2007 it rolled a radio frequency identification (RFID) system covering 30 million of its products.

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M&S has announced that annual pre-tax profits fell by £706m, down from £1.1 billion the year before, but sales have risen by 0.4 per cent. Like-for-like sales in the UK fell by 5.9 per cent.

Sir Stuart Rose, chairman of M&S has recently completed a further review of the change management programmes the retailer has been undergoing. The company will now continue to move towards becoming a "multi-channel retailer" and increasingly invest in overseas stores.

"We are on a journey," Rose told BBC Radio 4 this morning. "We have changed the culture, we have revamped the logistics and we have spent hundreds of millions pounds on that journey, but it has been disrupted by the recession." Questioned on the recession Rose said he was "cautiously optimistic" and confirmed the company is investigating opportunities of moving into the financial sector in partnership with HSBC using its trusted brand.