M&S Sales Decline

- Sep 23, 2017 -

 

M&S's half-year results show the problems facing Mr Rowe in the UK, who took over in April.

Clothing sales in existing UK stores fell 5.9%, while its stronger performing food business saw sales drop by 0.9%.

Alexa ChungImage copyrightGETTY IMAGESImage captionAlexa Chung launched an M&S range earlier this year

Pre-tax profit dropped 88% to £25.1m, from £216m in the same period a year ago, partly due to higher pension costs.

The retailer also faces a further squeeze on profits from more expensive imports caused by the fall in the value of the pound.

"Our intention is that we won't have to pass those price rises onto the consumer in the New Year," Mr Rowe told the BBC.

'Medium radical'

Investors were unsure about M&S's results and store closure plans, with shares initially rising before falling quite sharply.

Russ Mould, investment director at AJ Bell, said: "Cost-cutting will help to support earnings forecasts but this will only take M&S so far. To truly revive profits the company must get clothing and home right, and it is currently hard to argue that M&S has really found its fashion handwriting."

Liberum analysts said they had "wanted to see radical action from M&S", but that they saw Mr Rowe's plans as "medium radical".

Matthew Hopkinson, a director at the Local Data Company, said that although M&S was closing a relatively small number of stores, it would have "a big impact for the towns where they have been the High Street anchor for many years".


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