M&S profits plunge as revamp falters
MARKS & SPENCER is set to announce this week that profits are down by a fifth.
Profits at the group are expected to have dropped by about 20 per cent to £218million, according to broker Investec, underlining the challenge faced by chief executive Steve Rowe in bringing the business back to growth.
Clothing and home sales – measured at stores open for at least a year – are expected to have declined by as much as 5 per cent. The company is also set to say food sales on the same basis were flat.
M&S will announce the closure of about 30 of its 940 UK stores and there will be heavy pruning of its portfolio of international outlets in countries such as France and China.
Rowe took over the reins of the business from Marc Bolland in April. Bolland had spent billions trying to turn the business around and he insisted that improvements to its store decor, supply chain and IT systems had improved its position.
He also opened stores in Paris – but M&S will this week signal a retreat with the closure of its flagship store in the heart of the City.
Investec said: ‘Despite being the market leader in clothing, M&S has historically struggled to buck industry trends. Whilst it has a number of self-help opportunities, it’s difficult to see profit growth near term.’