M&S is doubling down on brands strategy, sees £1bn potential
M&S is reportedly ready to dive even deeper into selling external fashion brands alongside its own label in a move that would take it even closer to a traditional department store model.
The company is currently co-leader of a select group of big names — of which Next is the other most prominent business — that were once own-brand operations but that have been adding other labels via straightforward wholesale concession deals, as well as licenses and outright ownership.
The Telegraph reported that the latest step in M&S’s rivalry with Next — and with mid-market department store John Lewis — will be an increase in the number of third-party brands it sells to 100 from 60.
Back in November, it announced that Ted Baker, Superdry, Lyle & Scott and Musto had joined its Brands at M&S platform.
It said the management team at the retailer believes third-party sales could reach £1 billion, a significant increase on its earlier, medium-term goal of £400 million in third-party brand sales. In the latest quarter, non-M&S labels made up around 8% of its e-sales, adding up to almost £30 million. So there’s clearly a long runway for growth here.
The third-party push will include beauty, sports and home, but fashion is currently the key category in the area.
M&S’s drive to sell a wider spread of labels is being accelerated by ex-Amazon fashion leader Nishi Mahajan who joined last month. The company only began selling branded products via its webstore two years ago but this area has been expanding fast with 50% growth in the latest quarter. And M&S branded product doesn’t seem to be suffering with most brand customers also buying an M&S item.
The retailer also told the newspaper that its approach is different to that of Next (which has doubled its third-party brands to 1,000 in three years), with M&S taking a more curated approach.
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