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M&S profits sink 34%

Marks & Spencer saw adjusted pre-tax profits crash 34% to £297.8 million for the 26 weeks to September 27. UK sales fell 1.1% over the period.

M&S said that like-for-like sales fell 5.7% over the period - this included a 6.2% fall in like-for-like sales of general merchandise, which includes clothing sales.

Total sales at M&S rose 0.8% to £4.2 billion, boosted by international sales which rose 23.9% over the six months.

M&S said it had maintained its position as the leading clothing retailer by value and volume in the UK. Clothing market share was 10.9% for the 53 weeks ended September 14, according to data from TNS Fashiontrak.

M&S said it planned to strengthen its position in the over 45 market with the introduction of a new womenswear sub-brand called Portfolio. It added that it planned to grow market share in kidswear, footwear and accessories.

M&S chairman Sir Stuart Rose said: "Market conditions and consumer confidence declined through the half, leading to reduced profits year on year, due to lower sales and investment in margin. We have managed out cost base tightly. The interim dividend is maintained at 8.3p."

"Our plan is to manage the business through the economic downturn by tightly controlling costs, capital expenditure, cash flow and stock. We have a strong balance sheet underpinned by significant property assets and a secure funding position. We also have a strong brand and believe we are well positioned to compete by improving our operational delivery and continuing to focus on quality, value and choice. We are confident we have the right plan to bring M&S through these difficult times."

Rose added: "Trading throughout October has been volatile with recent events in the financial markets and their impact on the wider economy further weakening consumer sentiment. We remain cautious about the outlook for the remainder of the year."

See the attached Pdf for the full interim results statement.

Readers' comments (1)

  • A tough year for M&S coming up. Interesting they plan to launch yet another sub-brand. Hope they execute it well because some of their stores are already hard enough to understand in terms of the millions of different ranges.

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