Marks & Spencer annual profit slumps by £100m
Experts say high street giant is 'nowhere near ambitious enough' as clothing sales dip
MARKS & SPENCER'S annual profits slumped to a four-year low as poor clothing sales hit the high street giant.
While underlying sales of food rose by 1.7 per cent, sales of general merchandise – a sector dominated by clothing – fell 4.1 per cent in the year to 20 March. The poor clothing sales pushed pre-tax profits down 14 per cent to £564.3 million, from £658 million last year even though group sales, buoyed by international takings, rose 1.3 per cent to £10 billion.
Speaking shortly after M&S's results were unveiled chief executive Marc Bolland told the BBC the current state of the market was "challenging". He went on: "We won't duck the fact that we feel we have underperformed in general merchandise. We have to improve on quality."
Bolland has asked investors to wait for the improved autumn/winter 2013 collection to debut in shops after he brought in former Jaeger boss Belinda Earl as style director to help revive the womenswear department. The collection was praised after being unveiled last week. However, Bolland's struggle to turn the brand round hit trouble last month after it was revealed head of lingerie and beauty Janie Schaffer had quit just three months into her job.
Retail analysts Conlumino were unimpressed by the results, saying M&S is "nowhere near ambitious enough on the general merchandise front". They added: "In our view the company is too risk-averse and is unwilling to break the mould of its traditional ways of doing business."
But the City responded positively, with the company's shares rising 2.2 per cent to 450p in early-morning trading.
M&S also announced head of marketing Steven Sharp would retire next February, to be replaced by former Estée Lauder executive Patrick Bousquet-Chavanne.