M&S' critical autumn 2013 womenswear preview: What the analysts say

All eyes will be on stores and customer feedback in August but the preview, 50% of which was earmarked for all-stores this year, provided support for the idea that M&S is looking to get its mojo back in fashion. We currently forecast 1% LFL growth in General Merchandise this year but if the changes gain traction the step-change in performance is likely to be more marked in our opinion. There is a precedent for M&S fashionability/range driving a turnaround in the performance of the share price. For example back in Aut 2005 the stock rallied over 40% in 6 months when the team delivered a step change in the offer. Although competition, customer segmentation, and the economic backdrop are all very different now to then, investors should not under-estimate the potential from these changes should they gain traction, particularly given the weak comparatives for the year just ended where the design/buying team were in turmoil/transition. Matthew McEachran, Singer

The company plans to significantly increase the fashion and quality element of its ranges while reducing the number of SKUs. It is the right strategy, we believe, but not without significant risk.1) It will, in our view, take time before the new ranges resonate with customers and possibly up to three seasons before we see any material upside to general merchandise like-for-likes. 2) It will also take time to attract the younger, freer spending consumers. M&S’s core customer has got older, become more used to sporadic promotional activity and has become more focused on price rather than value for money.3) The new plan, we believe, will have cost implications which could potentially involving store refurbishments, a re-branding exercise and an increase in marketing costs. Capital expenditure thus might not decline in FY15 as originally forecast. Capital expenditure was £766m in FY12 and is forecast at £825m in FY13. Freddie George, Cantor Research

The M&S Autumn/Winter preview event last night was an important one The team came across very well, in our view. Crucially, there is a renewed focus on product quality - we thoroughly support this (and it is long overdue). On the fashion credentials, we were less enamoured - but as always, until clothes are in stores it is harder to fully assess. On price, M&S is planning to attempt to increase its price positioning through mix - this is sensible and to some extent is the only option in our opinion. More negatively, we are somewhat concerned that yet again the strategy relies on younger customers - to what extent it does management would not be drawn on. As with any strategy, execution is now key. Bethany Hocking, CFA, Investec

Despite some hedging on the time it will take to get the business really humming again, the overview by the new clothing management team of John Dixon, Belinda Earl and Frances Russell was confident in tone, with a big focus on quality and innovation. M&S has issued a new “Quality Charter” to boast about its credentials and heritage and a book called “The M&S Difference” has been produced. Though people whose opinion we respect think the new range is quite nice, we are more interested in how the range will be presented in the stores. The proof of the pudding will be in how well the range is merchandised, branded and stocked when it reaches the stores this autumn (and how helpful the weather is). Nick Bubb, independent analyst

It is clear that style director Belinda Earl and her team have pulled out all the stops. This is the make or break collection for the retailer’s ailing fashion division and the new range marks a credible effort by Marks and Spencer to convince us of a revolution within its womenswear. The biggest accomplishment in the new launch is its coat range – the sleek, rose pink fifties-style coat and the ultra-elegant faux fur-cuffed number will no doubt prove persuasive pieces. Other winners include a quaint, countrified, ‘Best of British’ scarf. However its core offer, the now re-branded M&S Collection, betrays a limited interpretation of upcoming trends and is largely lacking in imagination. In recent years loyal customers have become disenchanted with the retailer’s fashion offer, yet it is interesting to note that not a single one of the press release models resembles the image of a traditional M&S customer. Anusha Couttigane, Fashion Consultant at Conlumino