Marks & Spencer (M&S) has blamed “weak” clothing and home sales for a 17.1% year-on-year drop in its profit before tax and adjusting items, for the six months to 28 September.
It fell from £213m in September 2018 to £176.5m this year.
Clothing and home revenue slumped 7.8% year on year, and by 5.5% on a like-for-like basis, which the retailer put down to “shape of buy and supply chain issues” during the period. Total group revenue fell by 2.1% year on year from £4.97bn in 2018 to £4.86bn.
In line with its transformation programme, M&S closed 17 full-line stores in the six months to September and said it will open a new clothing and home trial store before the end of the year.
It did, however, warn: “Clothing and home net store closures will reduce sales by c.2% (previously c.3%) [in the second half] due to the timing of closures”.
Overall M&S “expects” to close fewer stores in the remainder of the year.
Despite £75m of cost savings in the first half, M&S’ net debt rose by 3.7% to £4.13bn.
Speaking of its transformation plan, which M&S announced in 2016, CEO Steve Rowe said: “In clothing and home we are making up for lost time. We are still in the early stages [of the programme], 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.
“We have taken decisive action to trade the ranges with improved availability and shorter clearance periods. In some instances, dramatic sales uplifts in categories where we have restored value, style and availability illustrate the latent potential and enduring broad appeal of our brand.”
M&S relaunched its own-label brand Per Una in October, and claimed to have introduced “more contemporary” fit and product, and reduced options across clothing and home for autumn 19.
Looking ahead, the retailer added: “Decisive tactical actions to drive [clothing and home] trade are already being implemented, including adjusting prices in season and shortening clearance periods.”
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