Marks & Spencer Group PLC Update
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Marks & Spencer has invested more than £ 20 million in technology funds as it made the first venture capital investment in 137 years of history and retailers are accelerating the transition to digital-first business.
The FTSE 250 Group will be the cornerstone investor for new funds managed by True. The fund manages private-equity-style vehicles and operates a network that connects consumer businesses with technology start-ups. M & S has been working with True since 2018, but this is the first time it has made a significant financial commitment.
“It’s already led to some fruitful commercial involvement,” said Eoin Tonge, chief financial officer of M & S, saying the partnership has “already led to some fruitful commercial involvement,” including posting the children’s clothing brand Frugi on retailers’ websites. rice field. “But we’re starting to think about the next growth area for us, something that might be relevant in more than five years,” he said.
Tonge added that the company’s main purpose was to ensure early access to new technologies and thoughts, but that commitment was expected to pay off.
True has invested up to £ 50 million in digital-first businesses that take advantage of changes in consumer behavior, including e-commerce growth and increased awareness of sustainability.
Approximately £ 600 million is managed through investments from workplace wellness app Unmind, staff roster system Rotaready, and online furniture retailer Cotswold. M & S will act as a major investor in the first round, aiming to raise a total of £ 275m with the latest fund.
M & S dates back to the 1884 Leeds stalls, but its relationship with technology has never been so easy. Built at a considerable cost to process online orders, Leicestershire’s automated warehouses took years to reach industry-standard levels of reliability. Until recently, retailer customer websites had a reputation for being slow and clunky, while many of their internal IT systems were still running on older mainframe computers.
However, since the establishment of a new management team led by Chair Archie Norman, companies have invested heavily in technology and used pandemics to accelerate the process.
“Culture has changed since 2018,” said Tonge. “Some of them were purely necessary. The world has changed and we cannot survive in the spirit of the store alone.”
True co-founder Matt Truman said Norman was extremely important. “I’ve been involved in M & S since Archie took office. He was a major driver of that cultural change. He’s always very much about the” buy, build, or partner “approach. It was clear. “
True works with other retailers such as Primark, John Lewis, Wm Morrison in the United Kingdom, Walgreens Boots Alliance in the United States, and TJX.
Lisa Hooker, head of retail, consumer and leisure at consultancy PwC, said the increased use of partnerships by retailers reflects the perception that technology is not their core competence.
“Why do you do all this yourself when you can work with the best people in your job?” She said. “Such initiatives give companies access to up-and-coming brands, knowledge and interesting technologies.”
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