Best known to the female population of England as the definative place to acquire underwear, Marks and Spencer is a leading retailer of clothing and in the UK with over 300 stores countrywide serving 10 million customers a week.
A trip to the affectionately nicknamed Marks and Sparks used to define the transition from girl to woman for many in the past due to their bra fitting service, but lately the company has found itself in financial difficulties.
In the Beginning...
Michael Marks, a Polish refugee, was born in Slonim, Russia in 1859. He emigrated to England in his youth and found it difficult to find work as he didn't have a trade and was unable to speak English speaking only Yiddish. Despite this he moved to Leeds and found a job with a company called Barran which employed Jewish refugees.
In 1884, he met Isaac Dewhurst who owned a warehouse in Leeds. Between them, the two men agreed on a deal where Dewhurst would sell goods to Marks so that he could sell them on village market stalls around Leeds. This business venture was very successful and Marks soon saved enough money to pay for a regular stall in the covered Leeds Kirkgate Market as well as two other markets in Castleford and Wakefield.
Marks' stall at Kirkgate market opened six days a week and sold goods which were priced at one penny in a very similar marketing strategy to the pound shops of today.
Exhibited on the stall, nicknamed the Penny Bazaar there were posters proclaiming,
"Don't Ask the Price, It's a Penny"
Due to the success of this business idea, Marks' opened other similar stalls in market halls around Yorkshire and Lancashire.
By 1893, Marks had earned enough money to move to 20 Cheetham Hill Road in Manchester where the following year he opened a shop in the lower part of the building.
The same year as Marks opened his Manchester shop, he decided that he needed a business partner and approached Isaac Dewhurst. Dewhurst declined the offered but suggested that Tom Spencer, his cashier might be interested in the opportunity. Whilst Marks had been establishing his sales company, Spencer had been observing the company from a distance and decided that he would be willing to invest the £300 that Marks requested for a half share in his business as he thought it would be a good investment. Whilst in Manchester, Spencer's wife who was a schoolteacher helped Marks improve his pidgin English.
From the beginning, Spencer managed the office and warehouse whilst Marks continued to run the market stalls. This was a wise decision for the pair as Spencer had developed important contacts whilst working for Dewhurst and managed to persuade manufacturers to give him a good price for goods he wanted to buy for the company.
In the first few years of trading together, Marks and Spencer opened shops in Manchester, Birmingham, Liverpool, Middlesborough, Sheffield, Bristol, Hull, Sunderland and Cardiff.
By 1901, the two buisnessmen had made the company so strong that they commissioned a building to be built in Derby Street in Manchester which was to be their head office as they now had 36 branches including stores in Bradford, Leicester, Northampton, Preston, and Swansea with London alone had seven branches.
Two years later, Marks and Spencer made the transition to be a limited company. Spencer's initial investment of £300 had now increased to £15,000 and he decided that he would like to retire which he did later the same year, 1903. Marks decided that he would like to continue with thier company which he did.
In 1904, the company bought premises at the newly opened Cross Arcade in Leeds. This site close to Marks' original market stall site showed how far he had come since the early days when he originally ran the buisness on his own. Unfortunately, Spencer didn't live to see much more progress as he died 25th July 1905.
A record year was to be had by Marks and Spencer in 1906. This year the company took
proving that Marks and Spencer were now successful countrywide.
A Family Business
A big change happened to the company in 1907 as Marks died shortly after collapsing on 31st December. Despite both founding members passing away, the company continued with fresh faces at the helm including Simon Marks, Michael Marks' son, who when he became chairman in 1916 employed his childhood friend Israel Sieff as company director. The two Jewish men were such good friends that the company had a family atmosphere enhanced by the two friends marrying each other's sister.
Some of the changes implemented in the three decades were
- 1920s - Marks and Spencer implemented a policy of only buying produce direct from the manufacturers.
- 1926 - Marks and Spencer Limited made the transition to a public company.
- 1928 - The company registered the St Michael trademark. This trademark was chosen in memory of Michael Marks, the founder of the company by his son Simon Marks.
- 1930 - Marks and Spencer opened their flagship store at Marble Arch, London, England.
- 1931 - The company opened up a food department selling fresh produce and tinned goods.
Also in the 1930s, Marks and Spencer introduced cafe bars into many of its shops providing hygenic and nutritious food on a mass catering scale. These meals were reasonably priced and made efficient use of the food which was available, especially in the time leading up to World War II.
In 1933 Simon Marks decided that a staff welfare system for the companys employees would be a good idea so employed Flora Solomon to set up the scheme. As well as provided subsidised staff restaurants, it provided a health and dental service, hairdressing, pensions and camping holidays.
The next year Marks and Spencer established their own research laboratory run by Dr Eric Kann to enable the company to design new fabrics. This research department was the first of its kind for a British retailer.
In the Second World War, Marks and Sparks worked within the guidelines of the Utility Clothing Scheme's strict specifications of the design of clothes and the use of materials. A scientific researcher from the company was given the job of helping to design a range of clothes for the company which retained the quality which the company was used to within the wartime restrictions.
As well as the new clothing range, staff from the company raised money to pay for a Spitfire aeroplane which they donated to the country to help with the war effort.
Rules and Regulations
Different rules were introduced over time when it was felt necessary. These included a no smoking rule in 1959 and a ban on dogs in store in 1961 with the exception of guide dogs.
After Simon Marks died in 1964 after 56 years of service to the company, Israel Sieff took over as Chairman. The company carried on running as it was before Marks' death, and changed with the times when it was thought appropriate.
This included : -
Also in 1988, the company bought the American clothing company Brooks Brothers, and the American food chain Kings Super Markets which strengthened their position in the worldwide market. Unfortunately this did not last long as in the late 1990s Marks and Spencer started to have financial difficulties.
After being in business for just over a century, Marks and Spencer started to lose its footing finacially. With less of an influence from the Jewish community and with the original family values being lost through the death of the original family members and the retirement of Lord Sieff of Brimpton, Marcus Seiff, Israel's son, the company were accused to resting on their laurels. This forced the company to take drastic measures which they did very publicly through the use of television campaigns after news coverage of their problems. Ranges of clothes were rebranded and eventually a new range of clothes designed by famous fashion designers for the high street market were released. These allowed every day people to be able to afford a designer label. This helped the company be rated as the fourth most profitable retailer in the world by 1997 with profits reaching £1 billion.
By 2002, the Chairman of Marks and Spencer released the following statement.
"The restructuring is complete and the changes to our capital structure – including the return of £2bn to our shareholders – have increased our potential earnings per share. Best of all, we’re seeing a marked improvement in our performance. In the 12 months to 30 March 2002, sales from continuing operations were up by 3.8% and corresponding Group operating profits by 30.8%. During the 2001 calendar year, Marks & Spencer was the best performing share in the FTSE 100. Customers are coming back, buying more and telling others. "
In 1996 Marks and Spencer changed the way in which they delivered their goods by introducing gas powered delivery trucks which produced 90% less particulates than previous delivery vehicles. This wasn't the only environmental scheme which the company introduced. A Global Sourcing Principles code of practise was introduced in 1999 in a hope to improve the working conditions of overseas workers.
An online shopping facility was added in 1999 which was promptly followed by many awards including : -
Marks and Spencer also believe in environmental issues. Their accolades includes : -
Presently Marks and Spencer have more than 300 stores in the United Kingdom totalling around 12.5 million square feet of shopping space. As well as these retail outlets, Marks and Sparks has an additional 50 stores worldwide which includes approximately 130 franchise stores in 27 different countries.
Since 1910 there has been comment from a variety of sources about the heavy influence the company has on Jewish issues and how much influence the Jewish community has on Marks and Spencer. Rebecca Sieff, Israel's wife, and Simon Mark's sister co-founded WIZO, the Women's International Zionist Organisation in 1920 as well as helping to run it for 20 years. Simon Marks and Israel Sieff themselves ousted the robust anti-Zionists at the British Jews' Board of Deputies in a coup-like operation. Along with this action they set up a Palestine office in London and helped along the 1917 Balfour Declaration which was a statement of Britain's support for a Jewish state.
In 1934, both the Marks and Sieff families set up a scientific research institute in Rehovot called the Daniel Sieff institute which in 1948 incorporated Israel's renowned Weizmann Institute.
When the company bought $233 million worth of goods from Israel in 1999 this was also questioned.