M&S reveals another year of falling profits

Lester Mason
May 23, 2018

That compared with profit after taxation of 117.1 million pounds a year earlier.

With this plan, M&S intends to pull back itself after experiencing years of falling sales and profits.

"In Food, we expect year end space to be broadly level, as we open new Simply Food stores, but close less productive Full Line space".

Retail veteran Archie Norman, who took over as M&S chairman previous year, said the retailer has been "drifting" and promised to speed up changes.

Bottom-line net profit tumbled nearly 80 per cent to 24.7 million pounds in the group's financial year to March 31, M&S said in a statement. On an adjusted level, profits fell 5.4% to GBP580.9m, impacted by the decrease in food gross margin.

Total sales edged up 0.7% to GBP10.7bn. The Company operates through two segments: United Kingdom and worldwide. In the 10 months to Christmas, sales fell 11% and losses hit £123m.

"Alongside relocations, conversions, downsizes and the introduction of concessions, these closures will radically reshape M&S's clothing and home space", the firm said.

Its thought hundreds of jobs are now at risk but Sacha Berendji the director of retail operations at the company said: "Closing stores isn't easy but it is vital for the future of M&S".

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

The company further updated investors on its transformation programme today, with chief executive Steve Rowe saying that the first phase of the plan, dubbed "restoring the basics, ' was 'well underway". "These changes come with short term costs which are reflected in todays results".

Rowe said it was targeting sustainable, profitable growth in three to five years time. "Our supply chains in both Clothing & Home and in Food require significant upgrades, so that we can be faster to market, reduce high stock levels in Clothing, and improve availability and waste in Food".

"The new organisation, really largely two (clothing and food) businesses, will be in place by July", he said.

"This latest wave of closures will feel like a body blow to locations that are already under pressure" says the BBC's Emma Simpson, "but the hard truth is that M&S has more stores than it needs, given our changing shopping habits" and many experts believe that closing a large swathe of stores "is a tough but necessary step".

Other reports by Iphone Fresh

Discuss This Article