Thursday, November 23, 2017

Profit falls 3.9% at Marks and Spencer

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High-street giant Marks and Spencer has suffered a 3.9 per cent fall in annual profits to £623m, the third consecutive year profits have fallen.

Today‘s results mark the conclusion of chief executive Marc Bolland‘s three-year turnaround plan.

Group sales rose 2.7 per cent to £10.3bn in the year to 23 March while UK food sales rose 1.7 per cent on a like-for-like basis. General merchandise fell 1.4 per cent.

It is the first time that M&S has earned less money annuals than rival Next.

Bolland, who has been chief since 2010, said it was “focused on improving its performance in general merchandise” and was “pleased” to see early signs of improvement.

He added: “Our food business had a very strong year, consistently outperforming the market.”

Multi-channel sales through online, tablet and mobile surged 22.8 per cent but M&S said it would take four to six months for its new website “to settle in.” It has invested heavily into its supply chain and IT systems and reassured shareholders by saying its capital expenditure will fall from £710m to £500-550m in each of the next three years.

Neil Saunders, Managing Director of Conlumino, commented: “Things that were holding the company back – like a dated website, poor inventory management, and inadequate e-commerce logistics – have been invested in and brought up to date. These investments are not necessarily revolutionary but they give M&S a fighting chance to compete with other more nimble climbers on Retail Mountain.”

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