M&S sees profits plummet 17 per cent
M&S profits down, but shares go up
The UK’s retail woes are continuing, with high street stalwart Marks & Spencer reporting profits down 17 per cent, as clothing sales continue to struggle.
The retailer’s revenue fell 2.1 per cent to £4.9bn ($6.3bn, €5.7bn) for the six months to September 28, while total sales fell 2.1 per cent to £4.86bn.
M&S said that while its food business was "outperforming the market", there have been problems in clothing and homewares.
Total food sales were up 1.2 per cent and like-for-like sales rose by 0.9 per cent. However, clothing and home sales plummeted by 7.8 per cent during the half year, while like-for-like sales were down 5.5 per cent.
Chief executive, Steve Rowe, blamed the decline on supply chain problems and buying errors, which saw popular sizes selling out in store and online. As a result online sales
Rowe said: “We are making up for lost time. We are still in the early stages but we are clear on the issues we need to fix and, after a challenging first half, we are seeing a positive response to this season’s contemporary styling and better-value product.”
Despite the disappointing figures, the company's shares are up 4.5 per cent at 190.60 pence.
The 135-year-old store is of the best known names in British retail, but has struggled in recent years due to tough competition from big fashion brands, such as Primark and Asos. In September it lost its place in the FTSE 100 for the first time since the index launched in 1984.
To combat losses the retailer has been closing stores around the UK, while earlier this year it paid £750m for half of Ocado's retail division, so it can offer a grocery delivery service.
M&S isn’t the only UK retail store suffering. Mothercare is to close all its 79 shops in the UK, putting 2,500 jobs at risk. However, the mother and baby products retailer is looking at options to keep the brand going in the UK. It has raised £3.2m from shareholders and is in talks with potential new partners.
In direct contrast, Primark is expanding, with plans for 19 new stores, plus relocations and extensions. The fast-fashion empire grew sales 4 per cent to £7.8bn, while UK sales rose 2.5 per cent.
Mothercare in administration
Primark owner’s figures