A quiet revolution: the rise of Marks & Spencer (Part I)

This is the story of how Marks & Spencer became one of the largest retailers in Britain.

Michael Marks establishes the business
Michael Marks, a Russian-Jewish immigrant, established a “Penny Bazaar” in the Kirkgate open market in Leeds, Yorkshire in 1884. Marks sold haberdashery goods, and no item cost more than one penny.

Marks soon opened a stall at the covered market in Leeds, which was open seven days a week. Outlets were then established in the booming cotton towns, such as Warrington, Birkenhead and Wigan.

Marks & Spencer Penny Bazaar in Cardiff
A Marks & Spencer Penny Bazaar in Cardiff

The steady expansion of the business saw Marks recruit Thomas Spencer, a cashier, as a partner in 1894. There were 12 shops and 24 stalls in covered markets by 1901.

Spencer retired in 1903, and Marks & Spencer was registered as a limited liability company.

Simon Marks revolutionises the business
By the time Michael Marks died in 1907 there were over 60 retail outlets. He was succeeded as head of the company by his son, Simon Marks (1888 – 1964).

Simon Marks noted the rapid growth of the low-price Woolworth chain in Britain during the 1920s. He travelled to the United States in 1924 in order to discover the secrets behind its rival’s success.

Open his return to Britain Marks decided to cut out the middleman, and deal directly with manufacturers. On the basis that it was the merchant rather than the manufacturer who knew the customer best, Marks & Spencer would design its own clothing and goods, and then find a contractor who could produce to the specifications and cost.

Simon Marks declared that his ethos was to give everyone, “a little bit of luxury, to make a factory girl look like a debutante”.

The penny pricing system had ended during the First World War, but a new five shilling price-ceiling was introduced from 1924.

Marks & Spencer had 125 stores by 1926, and the business was floated on the stock exchange in order to fund further expansion. That year, Marks was joined by his brother-in-law, Israel Sieff, as joint-managing director.

Marks & Spencer employed 11,555 people by 1935, and ranked as the 55th largest employer in Britain.

Opening new stores, and the redevelopment of existing stores, allowed Marks to reposition the business from a working class market to a classless one. Repositioning meant that Woolworth was no longer a competitor by the mid-1930s. Symbolically, a state-of-the-art outlet was opened on Oxford Street, London, in 1938.

Marks & Spencer began to concentrate on clothing, which accounted for two thirds of sales by the 1930s. 80 percent of sales were in clothing by 1938, with the remainder in food. The business had built a niche in-between the value shops and the department stores. Marks & Spencer was able to boast that 92 percent of its goods were manufactured in Britain by 1939.

The Second World War resulted in the abandonment of the price-ceiling principle.

Marks & Spencer held a five percent share of the clothing market in Britain by 1950.

Marks & Spencer employed 28,403 people in 1955.

Simon Marks continued to revolutionise the business. He removed unnecessary bureaucracy by ending inventory tracking in 1957. Marks reduced overheads and passed on the savings to the customer. Any item of clothing could be returned without a receipt provided it bore the company’s trademark.

The Marble Arch outlet in London made for money per square foot of retail space than any other store in the world by 1961.

Marks & Spencer was the fifth most highly-valued public company in Britain by 1963, with a market value of £435 million.

Simon Marks died in 1964. His obituary in The Times described him as “one of the great formative influences in the social and economic life of England during the past generation”.

Click here for Part II of this history.

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