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Marks and Spencer (M&S) is looking to invest in retail tech startups through a new partnership with Founders Factory.
The high street retailer is the majority shareholder in the joint venture and will tap into in Founders Factory’s network of entrepreneurs and startups.
The aim is to develop new businesses and tap into their innovations as M&S goes through its own digital transformation strategy.
M&S chief executive Steve Rowe said Founders Factory has “a great track record in creating successful businesses”.
“[The partnership] gives M&S access to a global network of startups and entrepreneurs which will provide disruptive thinking and questioning to the way we work at a time of critical transformation in the business,” he said.
Founders Factory’s co-founder and executive chairman, Brent Hoberman said: “After over 60 investments in the last two years, we have seen the huge potential of combining startup innovation with corporate scale and expertise, and so we are excited by this new chapter in a sector that is changing so rapidly through technology.”
M&S announced plans for its five-year digital transformation in November 2017, with the company set to introduce a number of changes. These include a reworked website, a more agile technology operating model and alterations to its supplier base as part of its Technology Transformation programme.
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The retailer’s financial results for 2017/18 showed a 62% drop in profits. CEO Rowe cited the initial technology changes as a decreasing contributory factor.
“The first phase of our transformation plan, restoring the basics, is now well under way, and the actions taken have increased the velocity of change running through our business,” he said. “These changes come with short-term costs, which are reflected in today’s results.”
Rowe said M&S is trying to become a more digital business, and in response to the increasing demand for online shopping and home delivery, the brand will be closing down 100 stores by 2022.
Despite the company now investing in startups, it has some way to go to match its competitors. John Lewis Partnership has been running its JLab accelerator with L Marks since 2014, and Waitrose as of last year. The programme gives startups access to mentoring, as well as funding for the most successful.
Intu has also been partnering with L Marks in its Intu Accelerate incubator. This programme also looks for startups centred around improving the retail experience, and provides mentoring to them as part of a 10-week course.