Re: Bankruptcy Soon?
Why do I have a feeling someone is heading to bankruptcy soon?
I very much doubt that M&S will be bankrupt soon. Sales have held up over the past five years (all things considering) although profits have been coming down fast. Costs will be slashed, the profits will have an uptick, and we'll then see further slow decline until they establish an equilibrium position for their high street presence (unless everybody wants to buy their clothing via the internet, which I doubt).
And whilst I'm usually a vociferous opponent of outsourcing, I think things are a tad different for high street retailers. Long ago, retailers abandoned vertical integration, and outsourced manufacturing, first to local manufacturers, and progressively across the globe; Their business is not IT driven (whereas an energy or telecoms supplier, or an Amazon is), and good IT is not really a critical success factor. So where M&S management are is as follows:
1) Real success is about fashion sense (for their target market), quality, value and store service.
2) IT is an evil necessity, and a cost. Being mediocre or worse is not going to harm them, whereas failing to manage purchasing, style, logistics, supply chains, and store stock levels will.
3) On line clothes and shoe retailing is a PITA - all about small deliveries, thin margins, shrinkage, and very high return rates, so not an attractive niche for a high street chain
4) Profits have crashed, so they're looking to cut all and any costs (hopefully they can also dump their sanctimonious Plan A marketing).
In the longer term outsourcing will bring problems for them. But if it isn't something they need to be good and quick at, and they've already outsourced product making to India, Vietnam et al, then why not outsource the IT there as well?
Sympathies to the poor beggars being TUPE'd.