M&S to slash marketing spend as profits dive

by Ben Bold, Brand Republic 05-Nov-08, 08:45

LONDON - Marks & Spencer is to slash its £144m marketing spend by 20% over the next year, a move that may see it drop high-profile models including Twiggy and Erin O'Connor from its advertising.

The revelation that the celebrated campaign and its models could go, reported today in the Daily Telegraph, comes as the chain's high-street stores felt the full force of the credit crunch in the six months to 27 September, with profits down a massive 44% to £307.8m.

According to the Telegraph, M&S's executive director of marketing, Steven Sharp, did not yet know whether the cut in marketing budget would see the models dropped. "We have a lot of options," he said.

Overall sales over the six-month period rose by 0.8% to £4.2bn; with international sales up 23.9%. However, like-for-like sales were down 5.7% and general merchandise and food sales were down 6.2% and 5.3% respectively.

Stuart Rose, M&S's chief executive, said: "The economic environment has changed dramatically and we are now facing the most difficult retail conditions since the early 90s.

"We remain confident in our long-term growth prospects: to drive our brand in the UK and improve the quality of our trading space; to grow M&S Direct; and to develop our international business. We must also respond to the current climate and changing needs of our customers."

It was a different story for budget retailer Primark, which reported a profit hike of 17% to £233m.

M&S's Christmas advertising campaign kicks off this week featuring, amongst others, Twiggy and O'Connor, while actor Robson Green is providing the voiceover for a series of food ads.

Comments

Natalie Doyle - 05/11/2008

The loss of celebrity endorsement of Twiggy and Erin O'Connor will further damage M&S' falling profits as the high profile models have become an integral part of the retailers success. Their presence has built the retailers' high credibility as a fashion brand, therefore abandoning this strategy may have a detrimental effect on M&S' identity. Twiggy has become a relatable spokesperson for the brand, appealing to their core audience of 35-54 year old middle aged women that are family focused, active and wealthy. Without her M&S will lose its unique personality which defines it's positioning. It is important to replicate quality in their advertising to maintain their reputation and ensure consumer trust in the current unstable market. Natalie Doyle, Jenny Orr and Robert Wilde