Marks and Spencer's new boss Steve Rowe has indicated his overhaul plans while noting that profits are likely to take a hit in the short term.
The British retailer recorded a 19.5% fall in its pre-tax profits to £488.5m in the year to 2 April. Total sales rose to £10.5bn in the 53 weeks. Underlying profits 4.3% to £689m. Its food sector continued to perform well reporting a 0.2% rise in like-for-likes, yet, as expected clothing sales fell by 2.9%.
Rowe announced that he plans to make a large number of changes to M&S's clothing range in particular and confirmed that the struggling division remains his "number one priority".
The new CEO also intends to cut the size of the top management by at least half in order to bring the business closer to its customers. The business also plans to cut prices, improve quality and enhance its customer service.
“Our results last year were mixed. We continued to outperform on food but we underperformed on clothing & home sales. This is not satisfactory and today we are outlining our initial plans to address the issues and to position Marks & Spencer to deliver profitable sales growth" Rowe said, according to The Telegraph.
“We are clear on the actions needed to recover and grow clothing & home, which is our top priority; to continue to grow our food business; and to focus on driving profitability. We are investing to re-establish our price position by sharpening prices and to enhance service by putting more employees into our stores."
“These actions, combined with the difficult trading conditions, will have an adverse effect on profit in the short term. We are, however, confident that our commitment to delivering the right product, price and service will help return clothing & home sales to growth. This, together with continued momentum in food, will provide us with a solid base from which to build a long-term sustainable business.”