M&S new look for all its stores

Marks & Spencer is set to launch its biggest store transformation programme in its 116-year history, in a final bid to revive its flagging fortunes.

Marks & Spencer is set to launch its biggest store transformation programme in its 116-year history, in a final bid to revive its flagging fortunes.

It is understood that chairman Luc Vandevelde is close to announcing that the company's 300 stores will be radically revamped in an attempt to win back disaffected customers.

The model for the overhaul is the new format stores which have been trailed in London's Kensington; at Fosse Park in Leicestershire, and at Sutton in Surrey.

Sources close to M&S revealed that the new format stores have achieved a 16 per cent sales increase. If sales growth continues in the new stores, then M&S's entire UK portfolio will be overhauled using this blueprint.

M&S's board is due to meet in the middle of December to make a final decision, and the company is currently costing out the plan.

By Christmas M&S hopes to have 25 new format stores open at a cost of £60m.

The retailer, which has seen 70 per cent wiped off its shares since their peak in 1997, is due to publish its half-year results on Tuesday.

But the City is bracing itself for another dismal set of figures. Analysts predict that half year profits will be £160m and the company is unlikely to make more than £500m in the financial year.

The new format stores represent a major break in tradition for M&S. In the past, the shops were kitted out with fittings designed to last 20 years. But as competition in the high street has intensified, M&S's stores have increasingly looked dull and antiquated.

Under the new format, the fittings are more flexible and have a much shorter write-off period. New colours and fittings can be quickly changed to mirror the season's fashions.

In addition, the product ranges in the new stores reflect more accurately the demographics of the local catchment area. For example, in Kensington, which is populated by many wealthy young women, the M&S store includes a beauty department and a personal shopping service.

Mike Godliman, a director at retail research group Verdict, said: "The new format is an improvement. The stores have a more modern feel and the product ranges are grouped together intelligently. When you walk into an old M&S store you are just greeted with a sea of trousers and jackets."

M&S's decline, which dates back to 1998, is due to a combination of complacency and increased competition in the high street from more aggressive middle market retailers such as Gap and Next. As a results M&S's margins have been squeezed.

However, Mr Godliman said that if M&S can get its act together, it is better placed than most to endure the tough conditions. "The retailers with scale will be the ones which eventually survive the margin squeeze," he said.

But he warned: "M&S is now doing the right thing to get itself out of the mess. But it needs to push through changes much faster."