Marks & Spencer profits plunge as store closure costs weigh

Marks & Spencer profits plunge as store closure costs weigh

According to reports, M&S will announce which of its 140-strong full-store network will close on Wednesday UK time, adding to the 20 already shuttered.

M&S is expected to report a second straight fall in annual profit on Wednesday, and with the retailer's shares down almost a quarter over the past year it is in danger of soon being booted out of the FTSE 100 index.

But M&S's underlying profit was better than the £573mln market forecast, sending its shares 5.7% higher to 308.5p in afternoon trading.

Revenue nudged up 0.7% to £10.7 billion.

The company was particularly slow to get its online operations into gear and has admitted its website remains "slow".

The retailer's troubled clothing arm saw like-for-like sales fall by 1.9% in the year.

M&S lost more ground in its fourth quarter, with like-for-like clothing and home sales down 3.4 percent, worse than the previous quarter's 2.8 percent drop, and same store food sales down 0.6 percent, against a third quarter fall of 0.4 percent.

"These, together with a challenging United Kingdom consumer market, mean that we have to modernise our business to ensure we are competitive and reignite our culture", it said.

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The performance was dented by 321.1 million pounds in costs linked to the retailer's ongoing store closure programme in Britain.

"Alongside relocations, conversions, downsizes and the introduction of concessions, these closures will radically reshape M&S's clothing and home space", the firm said.

"The team is now tackling transforming our culture to make M&S a faster, lower cost, more commercial, more digital business", he said, targeting sustainable, profitable growth in three to five years.

M&S left its dividend unchanged at 18.7p.

Marks & Spencer (M&S), one of the best known names in United Kingdom retail, first said it would reduce the amount of store space devoted to clothing and homewares in 2016, shortly after company lifer Steve Rowe became chief executive.

"M&S is simply struggling to make progress in a world where a compelling mobile app is every bit as important as a presence on the high street, and considerably less expensive".

When all is said and done, the Marks & Spencer closures will affect more than 1,500.

"We maintain our preference for strong brands, with distinct market positions and those that have well invested systems and infrastructure to drive online".

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