The largest clothing retailer in the UK, Marks & Spencer, has continued to turn around its fortunes, and has just reported an astonishing 35 per cent profit for 2005/6 of £751.4 million up from £556.1m the previous year.

Around 15m people visit the 399 Marks & Spencer stores every week, and it employs 65,000 people, but the past few years have been difficult for the retailer as it fought off unwelcome takeover attempts and very poor sales figures.

However, sales increased by 3.4 per cent. In clothing sales were up by 4.4 per cent in the second half of the year, and food sales for the year increased by seven per cent. Clothing accounts for nearly half of Marks & Spencer’s retail turnover.

Stuart Rose, Marks & Spencer chief executive, who took over the role in 2004, and is credited with reviving the ailing store said: “The Group has had a good year. Marks & Spencer is beginning to regain its confidence, but we still have much to do to ensure that we sustain growth in the long-term.”
The retailer has been focused on the UK market, selling its French and Spanish outlets in 2001, and recently exiting the US, selling its Kings Super Markets.

Technology plays a key role in the retailer’s operations. It has saved £10m from the cost of its supply chain IT systems as part of a drive to cut £230m of costs from the business, set up an IT centre of excellence 12 months ago and is now expanding its trial of RFID tags in preparation for a possible company-wide rollout. Marks & Spencer was an early adopter of RFID in 2003, and expected to put out more than 17m RFID garments for the summer season.

In April Marks & Spencer announced an important deal with, under which Amazon Services Europe will host and provide the technology behind Marks & Spencer’s branded website, its in-store and telephone ordering and customer services systems.

The retailer will remain responsible for the management of its website, customer service, warehousing and distribution.

The firm’s existing website already had over 24 million
visits every year, but Marks & Spencer management believes its
e-commerce and customer ordering capabilities could be improved. It said the deal with Amazon will allow it to focus on its core business.