Big IT spend drives M&S recovery

Marks & Spencer increased its IT hardware spend by almost 50% during the past financial year, despite its lacklustre results in...

Marks & Spencer increased its IT hardware spend by almost 50% during the past financial year, despite its lacklustre results in 2002.

The retailer, which has 318 stores across the UK, spent £25m on IT hardware during the year ending 29 March, compared with £17m in the previous 12 months.

Its financial results for 2003, which were released last week, showed pre-tax profits had risen from £335.9m to £677.5m.

Analysts said the positive results show that IT investment should not be dependent on how well a company is doing financially, but instead should be looked at in terms of how technology can be used to streamline operations and boost efficiency.

The increased investment in IT has seen M&S roll out radio frequency identification tags, self-scanning checkouts and a Microsoft .net-based security alert service at the point of sale.

The retailer is also planning to roll out a credit/loyalty card across the UK - a project that will cost £60m - following the success of a trial in South Wales involving 200,000 customers.

Last autumn, M&S chairman Luc Vandevelde told investors that the innovative use of IT was the only way that the company could move forward in the increasingly competitive UK retail market.

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