Business Analysis: M&S tempts back Middle England with new-look store design

Basingstoke makeover is shape of shopping to come as Rose seeks to reverse fortunes

For once, the group of customers encircling Stuart Rose didn't look like they were berating Marks & Spencer's newish chief executive. Maybe it was just the welcome glass of bubbly, but one silver-haired lady was positively beaming as she collared Mr Rose in the group's new-look Basingstoke store yesterday.

The reason for their smiles may have been the prospect of saving some cash on some early Christmas shopping, thanks to the group's "20 per cent-off" day. But chances are the small gathering was just pleased that their local store had been singled out to receive some much-needed TLC in the form of a £8m makeover.

The group's Basingstoke store, located in the town's Festival Place shopping centre (somewhat aptly named given the mood of the M&S bigwigs yesterday), is the first in its 375-strong estate to have been gutted and refitted in a manner befitting a retailer operating in the 21st century. Gone was the drab, dingy M&S of old. In its place, a gleaming, stylish store, cast in the mould of a Bond Street retailer.

If yesterday's in-store buzz lasts longer than just the opening party, then M&S could have found itself a refurbishment formula that will transform its image, and, if it's lucky, its top line. After all, apart from a lick of paint from the previous management, it has been years and years since the group's stores have been redecorated.

Steve Sharp, the group's store design, marketing and e-commerce director and one of Mr Rose's key lieutenants, is certainly confident. "I think this is an extremely large step in the right direction," he said, commenting on the revamped store. "Assuming it gets the green light from customers, we'll start to roll it out."

For Mr Rose, perhaps Basingstoke's single biggest achievement was not so much the new shop fittings, or even its elegant burgundy-and-mushroom colour scheme. No, Mr Rose seemed most pleased with the store's ability to transform its products. "It's the same merchandise. We don't pretend it's all right. But it's amazing what you can do to make the merchandise look a hell of a lot better in minutes," he said.

Suddenly, the very ranges to blame for a rumoured 18 per cent collapse in womenswear sales last week looked like clothes you could see yourself actually buying. Certainly Basingstoke's residents seemed to think so. At lunchtime yesterday, women were jostling each other to search the rails of party dresses and winter woollies.

Mr Sharp explained: "You get much more credit for product in this environment. It's the same product, you can just see it."

Marks, it appears, has banished for good its commodity approach to selling clothing. Where once there were entire archipelagos of different types of elasticated-waisted trousers, there are now a series of "looks". Trousers are mixed up with jumpers, which are mixed up with skirts.

Chris McManus, the group's retail design manager, says: "We are trying not to use the sales floor as a stock room." That means no more endless racks of cardigans in sizes 12 to 24 (anything smaller having sold out long ago). Thanks to a less cluttered shopping environment, a series of room dividers and better wall fittings, 37 per cent more stock can be displayed without overwhelming customers.

The most striking element of the new look M&S was the staff themselves. Freed from their restrictive blue and green polyester shirts and trousers, they were allowed to choose from a capsule collection of black and cream - although most opted for black. Nina, a fitting room "sales adviser", said: "The old uniforms were so old fashioned. These are more modern and we can accessorise them with colourful scarves or belts."

Eye-catching too, were the deep red tills, one of which was handily located in each section of the shop, rather than hidden on the back walls, using up valuable selling space. The changing rooms alluringly invited customers to "try it on....". And for once, the idea seemed an enticing prospect, thanks to the sense of theatre embodied by the giant photographs of an M&S fashion shoot that wallpapered the cubicle doors, and the massive ceiling-to-floor mirrors.

Other seemingly non-M&S features were piped music throughout the store, and a series of Wal-Mart-style tannoy announcements that invited customers not to miss the offer on men's suede jackets. The new food hall positively smacked of Harvey Nichols, with its mood lighting, silver fixtures and trendy signage.

But before too many of M&S's core blue-rinse brigade get scared off, Niall Trafford, the group's head of retail design, points out: "The important thing for us had to be about expressing the M&S brand rather than becoming something that it's not. This allows us to showcase our product really well." He admitted the group had been inspired by one of its arch-rivals, Next.

He added: "[The new store] is about getting some clear principles established about what we want to achieve for the customer. It's borne out of understanding that there is a huge amount more choice on the high street than there used to be. Therefore we have to make stores more enjoyable and more customer centric."

Customer feedback yesterday on the bright white store was almost uniformly positive. Diane Marshall said: "It's very nice, very modern. I like the fact that there's more space." Anona Edwards, 55, said: "It's a bit different from your usual M&S. There's no carpet on the floor."

Next week, three more refurbished stores will open: in Shoreham in West Sussex, Sutton Coldfield and in Edgware Road, London. After that, the group will wait to see what effect - if any - the makeovers have on sales. Although the group's two newest sites, in Speke on Merseyside and Swansea, have been a resounding success since opening earlier this year, both were new-builds, and therefore far from your typical M&S store. By contrast, the group has 200 stores under 50,000 sq ft - roughly the size of the Basingstoke one.

Mr Rose was confident yesterday that Basingstoke could be the blueprint for the rest of M&S's estate. "Absolutely," he trumpeted when asked. What he's less sure about is what to do with the group's Marble Arch store, its flagship. "It's better to get it right for our core estate than for our Oxford Street store," he said.

As ever, analysts remained cautious. One said: "M&S is coming from a very low base in terms of store environment so a different environment could have an effect on sales. But ultimately it's the product that matters. Unless the product is right and the pricing is right, it won't add up to a row of beans."