Marks & Spencer Group Plc

Marks & Spencer Group plc

The extension of international Business will increase the company's revenue growth. Marks and Spencer Group plc (Marks & Spencer) has acquired 50 per cent of Marks & Spencer Marinopoulos BV which operates 38 Marks & Spencer stores in Greece, a number of Balkan states, including Romania and Bulgaria, and Switzerland. The joint venture plans to open up to 50 new stores in these markets over the next few years. This announcement is in line with Marks & Spencer's plans to invest in its existing franchise partners where it will facilitate a faster pace of growth and greater operating efficiency. It will increase total revenue in the future.

Significantly improvement on company's overall performance. In year 2007/08 UK sales rose by 9.7% to £7.98bn (2006/07 £7.27bn). Food sales grew by 9.7%. General merchandise grew by 9.6% with clothing up 9.2% and home up 13.1%. Group operating margins grew to 12.2%, up from 11.0% last year. Group profit before tax rose by 28.5% to £965.2m (2006/07 £751.4m). (www.marksandspencer.com) And this trend will continue in the next three years.

Dramatic jump in earnings per share. From year 2004/05 to 2006/07 the earning per share increase from19.2p to 40.4p due to it's excellent performance. This situation can attract more valuable investors now and in the future which can better monitor and encourage the company to maintain the position.

2. Business Analysis

2.1 Company Profile

Being founded only as a small market stall in Leeds, with over 600 stores located throughout the UK and 240 stores worldwide, including over 219 franchise businesses, operating in 34 countries, nowadays Marks & Spencer becomes largest clothing retailer and one of the UK's leading food and home products retailers. (www.marksandspencer.com)

2.2 Strategy

Not just advertising, Marks & Spencer launched Plan A in January 2007, which contains 5 pillars as:

? Climate Challenge: To minimize energy use and carbon emission, and to maximize the renewable.

? Waste: To minimize the waste and to find new ways to recycle and reuse the materials.

? Sustainable Raw Materials: To ensure that the key raw materials come from a wide range of most sustainable sources in order to protect the environment.

? Fair Partner: To improve the quality of life of the suppliers.

? Health: To choose a healthier lifestyle for both the customers and the employees.

(www.images-na.ssl-images-amazon.com)

2.3 Financial Highlights and Business Activities

For 2007, the sales revenue rose by 9.7% to £7.98bn in total. Food sales grew by 9.7%, general merchandise increased 9.6% with clothing up to 9.2% and home products up to 13.1%. Group operating margins grew to 12.2%, up from 11.0% last year. Group profit before tax rose by 28.5% to £965.2m. Market share for clothing and footwear in UK went up from 10.4% to 11.1% and in food share reached a new high of 4.3%, up from 4.1%. The International business also performed well. Turnover, including eight wholly-owned stores in Hong Kong and 13 in the Republic of Ireland, rose 16.8% to £610.6m while operating profits rose 33.2% to £87.5m. (www.marksandspencer.com)

M&S Money is benefiting from the partnership with HSBC. Company's share of profits more than doubling from £9.6m to £19.5m. Over three million people now use the M&S credit card, and company have over 100 Bureaux de Change at the stores serving 3.8 million customers. The range of financial products has expanded as well, which now includes home and car insurance and a new ethical investment fund. (www.marksandspencer.com)

Moreover, M&S have made some important changes to the leadership in the last 12 months. The new supply chain, sourcing and planning for our clothing and home businesses, as well as the emphasis on e-commerce were brought together under the new management team.

2.4 Mergers & Acquisitions

Reported on 29th Feb 2008, Marks & Spencer enters into joint venture with Marinopoulos Group by acquiring 50 per cent of the Marks & Spencer Marinopoulos BV, which operates 38 Marks & Spencer stores in Greece, Romania and Bulgaria, as well as Switzerland, for 50 million euro cash. (www.marksandspencer.com)

3. Competitive