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M&S blames 'weak' clothing for first half slump

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.”

Readers' comments (2)

  • darren hoggett

    Having quick scan on their website, M&S Mens shirts are nearly all sub £30.00 and they have chinos at little as £19.50...

    The rot set in a long time ago when M&S went in the wrong direction as it unnecessarily worried about retailers like Primark and Next. As successful as those retailers are, they ended up being a distraction, as they should have been no concern to them.

    Consumers used to go to M&S not because it cheap, but because its was quality and things used to last. That is no longer the case, so what is their raison d'etre?

    If the consumer is prepared to pay a little more for their food, then they would for their clothes, but I fear they've gone down the wrong road for too long to turn back. They've blown it.

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  • Blaming buying and supply chain issues as the reason for poor performance only highlights senior management don’t have a grasp of the real issues. The only turnaround is the 360 degree spin and they’re heading in the same direction.

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