Marks & Spencer is expected to unveil its lowest profits for eight years when it publishes its results tomorrow.
Widespread reports are tipping the retailer to report annual profits of around £658m – a decline of 7% from last year’s £705.9m, which was itself a decline of around £10m.
M&S has seen seven consecutive quarters of falling sales of general merchandise, with clothing – and in particular womenswear – seen as the major contributor.
Last week it unveiled its autumn 13 collection – the first full range under new style director Belinda Earl, who heavily emphasised the new focus on quality and details.
It was well received by fashion editors, but analysts remain sceptical about whether it will be enough to turn the retailer’s fortunes around for this time next year.
The business has also come under fire for its tax arrangements over its online sales to Europe. A report by the Guardian this weekend claimed that while goods are shipped from the UK, the invoices are sent to Ireland, which is subject to a tax rate of 12.5%, more than half the 26% charged domestically.
M&S told the paper it paid UK corporation tax on “all profits generated by UK sales and comply with the tax laws of all jurisdictions in which we operate”.
It added: “”Our European websites are owned by M&S Ireland. This is made clear to all customers shopping on our European websites. Ireland is our largest international online market, taking over 50% of our online European sales, which is why we structure our other European websites around it. It would not make good business sense for us to set up anew in every market we enter.
“These are not UK sales, these sites do not serve UK customers and there are no sales made in sterling. All tax is legally and fairly paid both in the UK and in Ireland.”