Business of Fashion: Marks & Spencer’s No Longer UK Top Fashion Dog
European fast fashion retailer, Marks & Spencer’s (M&S), is no longer predicted to be the number one retail performer this year according to a recent report by Moody’s, the credit rating agency. Next is predicted to outperform M&S in the ongoing battle in fashion retailing.
According to Moody’s, while Next possesses an advantage over M&S in terms of brand recognition, online sales and cost control over the next year, M&S closed the gap on cost-effectiveness by buying more materials direct from suppliers. Even though M&S clothing sales were down, the retailer saw a vast increase in food sales, however; the ongoing grocery price war does not look promising.
Both retailers showed disappointing clothing sales during Christmas, citing poor product availability and unusually mild temperatures as reasons for this decrease. Next is highly regarded as the “most well-known fashion retailer in Britain” whereas M&S’s clothing sales have steadily declined over the past few years. The gap between both retailers’ performance is set to continue, cites Moody’s.
Ernesto Bisagno, author of the report, commented that “Next’s credit profile will remain stronger than M&S’ in the next 12 to 18 months due to its superior margins, which are driven by a combination of solid brand recognition, a premium online distribution channel and tight cost control.”
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