– by James Davey
Marks & Spencer is revamping its supply chain from “factory to floor,” the retailer’s new fashion boss told Reuters, to double annual online non-food sales to nearly 3 billion pounds ($4 billion).
John Lyttle, who worked at M&S in March MKS as managing director of fashion, home and beauty (FH&B), said the 141-year-old retailer had regained its footing after a cyberattack in April crippled online sales and cost around £300 million in lost profits.
He said M&S had done a good job of restoring its value, quality and style attributes, with FH&B sales increasing by 9 per cent in three years and market share increasing from 9.1 per cent in 2021/22 to 10.5 per cent in 2024/25.
The company must now focus on becoming a truly omnichannel retailer, Lyttle said in his first interview since joining M&S.
“This means that from how our goods are manufactured to how they flow into our warehouses, how our warehouses operate and how we then deliver those products to our customers – whether online or in our stores,” he said.
Simplifying and reducing supply chain costs is a priority for many companies in the wake of COVID-19, the war in Ukraine, the disruption of Red Sea shipping, and the general upheaval in global trade, most recently due to U.S. tariffs.
MORE LONG-TERM PARTNERSHIPS WITH SUPPLIERS
M&S, which mainly sources products from China, Bangladesh, India, Pakistan, Vietnam, Cambodia, Sri Lanka and Turkey, is looking to forge more long-term partnerships to reduce risks to supplies.
While progress has been made in recent years through supplier consolidation, M&S has “many more opportunities that we can exploit by transforming our purchasing practices, getting more margin from our scale, increasing cost discipline and reducing complexity,” said Lyttle.
The cyber hack has wiped out the strong turnaround under Stuart Machin, CEO since 2022. M&S’s 2024/25 profit is the highest in over 15 years and the company’s shares are at their highest level in almost a decade.
Dominic Younger, fund manager at Columbia Threadneedle Investments, one of M&S’s top 10 investors, said the company had made major and hard-fought progress in improving the FH&B front end.
“But one of the most exciting aspects from an investment perspective is that, in addition to evolving the food space, there are so many opportunities to modernize the apparel supply chain,” he said.
With a customer base of 21 million clothing customers, Lyttle says M&S’s supply chain overhaul can double FH&B’s long-term online sales from around £1.4 billion in 2024/25, while boosting its online operating margin to a double-digit valuation.
M&S is also aiming to increase its online share of total FH&B sales from around 34 per cent to 50 per cent in the medium term, said Lyttle, a former Boohoo CEO who also served in a senior role at Primark.
“If you look at our online sales share today compared to the market, we are about 10 (percentage points) behind,” Lyttle said, pointing out that M&S is even further behind some top competitors such as Next 
NXT lies behind.
Next, an early adopter of warehouse and distribution automation, makes about 59 percent of its UK sales online.
M&S can increase its online sales by optimizing the breadth and depth of its product offering, encouraging more customers to use its more than 1,000 stores for click and collect and returns, and deploying more channels such as lockers, Lyttle said.
The company will also introduce additional payment methods and relaunch its Sparks loyalty program to encourage customers to purchase more frequently.
INVESTMENT IN AUTOMATION
Part of M&S’s plan is a three-year, £120 million investment in automation to increase capacity, reduce complexity and deliver cost savings worth “multi-million” pounds.
M&S is spending £600m to £650m on capital expenditure in 2025/26, of which £200m to £250m will go towards technology infrastructure, store maintenance and upgrading the logistics fleet.
At its huge warehouse in Castle Donington in central England, M&S is investing in robotic technology that will speed up sorting of “click and collect” parcels and extend cut-off times for next-day delivery to almost midnight.
Further investment at this 900,000 square meter site and another in Bradford, northern England, will increase box storage capacity by more than 30 percent.
M&S is also accelerating the rollout of a new planning platform, with a new merchandising feature already available that automates what was previously largely done manually.
The cost savings don’t have to come at the expense of M&S’s 63,000 employees, Lyttle said, adding: “Growing our business means we move more product and so we need more people to help us do that.”
LESSONS FROM THE CYBER HACK
Although the cyber hack that forced M&S to revert to manual processes did not change the company’s strategy or longer-term plans, important lessons had been learned, Lyttle said.
“It’s not just the lessons learned from the actual incident. It’s just general things that we could have done better or faster,” he said, without revealing details.
“They don’t want the people who influenced us in the beginning to understand this in any way,” he added.
(1 dollar = 0.7451 pounds)
