M&S reveals another year of falling profits

May 23, 2018, 18:57
M&S reveals another year of falling profits

After taking account of adjusted items of £514.1m, including £321.1m of charges relating to store closures, pretax profit at M&S was £66.8m for the year ending 31 March 2018, a 62.1pc fall year-on-year. That figure dropped by 5.4pc to £580.9m, with the City predicting a steeper fall to £572.6m.

M&S earmarked 14 stores for closure on Tuesday, including in London's Bayswater and Holloway Road, with a total of 872 employees affected.

The fourth quarter's performance showed a deterioration, largely blamed on "unseasonable weather" despite an earlier Easter.

Currently, around 18 percent of M&S' clothing and home sales are made online.

M&S profits plunge 62pc amid sweeping store closure plans
M&S says it must accelerate change or fade away

Rowe's plan is the latest in a series of efforts to update the 134-year-old retailer, which has struggled to compete with the rise of cheap fast fashion chains and low-priced food retailers.

M&S has launched a series of turnaround plans since the financial crisis - with clothing and home consistently dragging.

"The first phase of our transformation plan".

Marks & Spencer (M&S), one of the best known names in United Kingdom retail, first said it would reduce the amount of store space devoted to clothing and homewares in 2016, shortly after company lifer Steve Rowe became chief executive. Actions taken under the plan include the sale and franchise of the firm's retail business in Hong Kong and Macau.

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"These changes come with short term costs which are reflected in today's results", he added.

"And we're concentrating on tackling the culture of the business, making M&S a faster, lower cost and more commercial digital business".

Rowe said it was targeting sustainable, profitable growth in three to five years time.

"In the previous year traditional retailers like Marks have faced a ideal storm of rising costs, a constrained consumer, and the relentless growth of online competition", said Hargreaves Lansdown analyst Laith Khalaf.

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"M&S is simply struggling to make progress in a world where a compelling mobile app is every bit as important as a presence on the high street, and considerably less expensive".

Marks & Spencer is the latest high street retailer set for radical restructuring.

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