Marks & Spencer will increase its spending on supply chain and technology despite a massive reduction in overall capital expenditure and a fall in profit.
M&S made £706.2m in the year to 31 March 2009, compared with over £1bn in the same period the previous year. The retailer reduced overall capital expenditure to £652m in the 12 months ended 31 March 2009, compared with more than £1bn the previous year. Spending on supply chain and technology increased from £162m the previous year to £188m.
The company's overall capital expenditure will be less this year, at £400m, but technology is set to take up a larger proportion of a shrinking budget.
The retailer will increase its investment in IT despite reducing its overall spending. To do this the company will reduce spending on property. "We will spend £400m [this year], shifting the focus of our capital expenditure from our property portfolio, where we have made considerable investment over the past three years, to our IT and supply chain infrastructure."
IT spending is usually the first victim of budget cuts during a downturn, but businesses that continue to invest will benefit in the future.
The increased technology spending is part of a programme, known as "2020 Doing the Right Thing", which will focus on changes in operations, new avenues to market, international developments and brand communication.
M&S chairman Sir Stuart Rose said the retailer's board has reviewed the entire business. "This confirmed our long-term growth plans [and] highlighted the need to deliver a step change in the way we service our customers' needs and operate our business," he said.
In January, M&S revealed it would be shutting 27 stores and shedding 1,200 jobs.