Marks & Spencer slumps to £201m loss as pandemic hammers clothing and home sales

Marks & Spencer has swung to a hefty loss for the past year following pandemic store closures, however its management said the business had moved to the “next phase” of its transformation plan.

The historic retailer tumbled to a £201.2 million pre-tax loss for the year to 27 March 2021 after its clothing and home business was particularly hammered by pandemic restrictions. Profit before tax & adjusting items was £41.6m, which was in line with analyst expectations. This performance compares a £67.2 million statutory profit in the previous year.

The group told shareholders that total revenues dropped after this slump offset an improvement in its food operations. Total sales for the 52 weeks to 27 March hit £8.97bn, compared to £10.18bn in the prior year.

It reported that food like-for-like revenues increased by 1.3% over the past year, but the company saw its clothing and home business report a 31.5% slump in despite despite 53.9% online growth. Store sales for clothing and home were down 56.2%.

Clothing and home operations saw a £129.4m operating loss, although M&S said the performance had improved in the second half of the year.

Sales for the division have returned to growth since the reopening of all stores on 12 April, M&S said.

Meanwhile, the company said it was buoyed by its food business, which saw 6.9% growth excluding its hospitality and franchise arms.

It also hailed a strong integration with Ocado after the two companies launched their online grocery joint venture last September.

The retailer said its balance sheet is also “stronger than expected” following the impact of the pandemic.

CEO Steve Rowe said: “In a year like no other we have delivered a resilient trading performance, thanks in no small part to the extraordinary efforts of our colleagues.

“In addition, by going further and faster in our transformation through the Never the Same Again programme, we moved beyond fixing the basics to forge a reshaped M&S.

“With the right team in place to accelerate change in the trading businesses and build a trajectory for future growth, we now have a clear line of sight on the path to make M&S special again.

“The transformation has moved to the next phase.”