Partly Cloudy

Partly Cloudy

max temp: 20°C

min temp: 12°C

ESTD 1874 Search

Retail: Marks & Spencer confirms third consecutive fall in annual profits

09:48 20 May 2014

Marks & Spencer in Westgate Street, Ipswich.

Marks & Spencer in Westgate Street, Ipswich.

Archant

Marks & Spencer boss Marc Bolland clocked up an unwelcome hat-trick today as the retailer reported a third consecutive year of falling profits under his stewardship.

shares

Underlying profits before tax declined by 3.9% to £623million in the year to March 29 with general merchandise (GM), which includes clothing, seeing like-for-like sales fall by 1.4% although food improved by 1.7%.

Mr Bolland said GM was showing “early signs of improvement”, with investment being ploughed in to transform the business.

“We are making solid progress on this journey and are now focused on delivery,” the chief executive said.

However, M&S warned that a new website launched earlier this year was taking time to “settle in” and would have some impact on GM sales in the weeks since the end of the financial year.

Mr Bolland, who has been in the top job at M&S since May 2010, has ploughed hundreds of millions of pounds into refreshing the business.

He has also hired new personnel and launched a celebrity-backed marketing push to try to revive dwindling clothing sales.

But the group revealed that profit margins in the division were hit by the cost of promotions and markdowns during the financial year.

It said it had continued to make improvements in buying and merchandising and worked hard “to improve newness and availability”.

But the company said: “We faced a challenging clothing market, with unseasonal conditions and high levels of promotional activity.”

Marks said the improving trend in clothing sales in the fourth quarter, when they picked up by 0.6%, had continued since the end of March.

But it said that its new website would, as expected, take four to six months to settle in and “have some impact” on the performance of the wider GM division in the first quarter.

M&S reported web sales up 23%, which it said outperformed the market, with 55% of these purchases now picked up in store. International sales rose 6.2%.

The group said an initial spending programme focused on its “strategic priorities” was now largely completed and this investment would fall to £500m to £550m a year for the next three years.

It expects to see profit margins in GM show “significant improvement” over that period through changes in the way it operates, while food margins are also expected to grow.

Total annual group sales were £10.3billion, with UK revenues of £9.16bn and international revenues of £1.15bn.

M&S is ramping up global expansion plans and during the year added 22 new stores overseas, focusing on key markets in India and China.

The figures confirm that the 130-year-old high street stalwart has seen its earnings overtaken by 32-year-old upstart Next, which earlier this year reported a full-year haul of £695m.

Today’s M&S profits figure is the worst since 2009, when it was £604.4m. It is a far cry from its pre-recession boom when earnings topped £1bn.

shares

0 comments

Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files
Comments

Please log in to leave a comment and share your views with other East Anglian Daily Times visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by East Anglian Daily Times staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique East Anglian Daily Times account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

Ransomes Jacobsen operations director Simon Rainger addresses staff as the company's last Ransomes Commander mover leaves the production line.

Staff at Ipswich-based turf maintenance machinery maker Ransomes Jacobsen have marked the end of an era, with the last Ransomes Commander mower having rolled off the production line.

Charles Manning on the new patio area at Bears Boutique Bar and Bowling in Star Lane, Ipswich

Businessman Charles Manning is pleased with the way his Bears bowling bar and grill is fitting into the entertainment offer in Ipswich – and with the business community.

The rate of growth in the UK economy rebounded during the second quarter of 2015, but the manufacturing sector continued to struggle, according to official figures.

UK growth bounced back in the second quarter of 2015 as gross domestic product (GDP) increased by 0.7%, according to official figures.

Artist's impression of how an office development in Sheepen Road, Colchester, could look

A council has managed to secure tenants for a new office development before work has even begun on building it.

Barker Gotelee has welcomed Lucy Underwood, conveyancing assistant, Linda Crawford, solicitor, Nicky Sunderland. trust and estate planning practitioner, and Lisa Hobbs, junior secretary.

Ipswich-based law firm Barker Gotelee has welcomed four new employees across its expanding business.

A Ryanair aircraft atStansted Airport.

Budget airline Ryanair today reported a 25% jump in earnings for the first quarter of its new financial year.

Alton Towers in Staffordshire.

Alton Towers owner Merlin expects annual earnings for its theme parks business to drop by as much as £47million this year following last month’s rollercoaster crash.

Manufacturers in the East of England are in confident mood, according to a new report.

Manufacturers in the East of England are helping to lead the way in exports and business confidence, according to a new report

Tom Gillman of Crafted.

Mediterranean Shipping Company, which has its UK head office in Ipswich, has launched a new global website, designed and built by locally-based digital agency Crafted.

IPRS Group celebration at Wherstead Park, Ipswich

Company celebration is a boost for charities

Most read

Most commented

Topic pages