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Tesco clothing hits £1bn asgroup profits fall

Tesco’s clothing arm F&F took more than £1bn last year, with like-for-likes up nearly five-times that of the wider business.

For the year to February 23, the grocery giant saw group sales excluding petrol rise by 1.8%, or 1.3% overall, equivalent to £72.4bn.

But the business reported its first loss in 20 years, with group trading profits down for the first time in almost 20 years – falling 13% to £3.45bn.

Pre-tax profits were down 51% to £1.96bn largely as a result of a £1bn write down cost for exiting the US market. In the UK group trading profits were down 8.3%, with Europe taking the brunt of the declines, down 37.8%.

However in clothing the supermarket’s performance told a very different story.

Sales in the UK alone exceeded £1bn for the first time, with like-for-likes up 9% in the year – providing one of the business’s few highlights, along with online growth of 13%, which has taken group sales above £3bn.

Chief executive Philip Clarke said: “The announcements made today are natural consequences of the strategic changes we first began over a year ago and which conclude today. With profound and rapid change in the way consumers live their lives, our objective is to be the best multichannel retailer for customers.”

He noted there had been “real progress in the UK”, adding: “Our focus now is on disciplined and targeted investment in those markets with significant growth potential and the opportunity to deliver strong returns.”

 

 

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