Marks & Spencer plunges to first loss in 94 years
Marks & Spencer has fallen to a loss for the first time in its 94 years as a public company after clothing sales were hit hard by enforced store closures amid the pandemic.
The high street giant fell to a £87.6m pre-tax loss for the 26 weeks to 26 September, swinging from a £158.8 million profit in the same period last year.
The retailer told shareholders it performed “better than expected” during the first half, with revenue falling less than initially predicted.
It said revenue for the period slid by 15.8% to £4.09bn after it was hit by lower clothing and home sales.
The clothing and home division saw sales dive 40.8% over the half-year, with a 21.3% decline in the second quarter as it benefited from the reopening of stores and strong online sales growth.
M&S reported that trading in October “has continued at similar rates” to the second quarter, with clothing and home sales down 21.5% but food sales up 3%.
Its grocery business performed “strongly” over the half-year, with like-for-like sales rising by 2.7% on the back of substantial growth from its Simply Food stores.
Meanwhile, the group also hailed strong growth in its Ocado Retail joint venture, which started delivering M&S food as the start of September.
It said the partnership has reported a 47.9% jump in sales, while profitability has also improved.
The update came as M&S continues to push forward with its Never The Same Again transformation programme.
It said the programme, which saw M&S slash 7,000 jobs in August, will enable the business to emerge from the crisis in a “stronger, leaner and more focused position”.
CEO Steve Rowe said: “In a year when it has become impossible to forecast with any degree of accuracy, our performance has been much more robust than at first seemed possible.
“This reflects the resilience of our business and the incredible efforts of my M&S colleagues, who have been quite simply outstanding.
“But out of adversity comes opportunity and, through our Never The Same Again programme, we have brought forward three years’ change in one to become a leaner, faster and more digital business.
“From launching M&S Food online with Ocado, to establishing an integrated online business division, ‘MS2’, to step-change growth, we are taking the right actions to come through the crisis stronger and set up to win in the new world.”