Marks and Spencer post strong first half performance

Marks and Spencer saw sales rise 6.5% to £4.2 billion and adjusted operating profit soar 9.1% to £488 million for the 26 weeks to September 29, thanks to a strong performance across fashion.

 

The retail giant said that UK like-for-like sales were ahead 1.6% for the period. General merchandise l-f-l's, which includes clothing, were ahead 2.3%.

Chief executive Stuart Rose said: "We had a good first half despite a tough market impacted by unseasonable trading conditions, and at a time when many of our stores were undergoing major refurbishment."

Marks and Spencer said that better styling, more choice and further action on pricing had enabled it to grow volumes on general merchandise by 9%. Clothing market share increased to 11% for the 52 weeks ended September 16 with a strong performance across all categories.

Web sales were also ahead 60% following the relaunch of the Marks and Spencer website in March. The retailer said it continued to target web sales of £500m by 2010.

However Rose was cautious about future trading. He said: "We have had a satisfactory start to the autumn season. We expect the retail environment to continue to be challenging and the outlook for consumer spending to remain uncertain. However, we believe we are well positioned for the important third quarter and into 2008."

Marks and Spencer also outlined future initiatives. Capex spend is slated to be between £1bn and £1.1bn for both 2008 and 2009. Around 90% of the store portfolio will have been refurbished by Christmas 2008. Meanwhile Marks and Spencer said it would also roll out its concept to emerging markets India and China. It will also add between 30% and 40% of new space in Ireland over the next five years and will expand its franchise operations in Central and Eastern Europe.

Separately, Marks and Spencer said it would introduce a 5p charge for its food carrier bags from February 3 following a trial in Northern ireland which led to a 66% reduction in the number of carriers used. The initiative is part of its Plan A eco-project.