Tangled web for Marks
M&S online ‘too slow’ as profits crash
EMBATTLED Marks & Spencer has admitted its online arm isn’t up to scratch – as it revealed a slump in profits.
The firm, fresh from announcing 100 store closures, said its website was “behind the best of our rivals” and “too slow”.
It also admitted its Castle Donington depot in Leicestershire, used for dispatching online orders, struggled to cope at busy times. It came as M&S revealed full-year profits crashed 62% to just under £67million in the year to March 31 after a £320m hit from its plans to close failing stores and revamping the business.
Clothing and homeware sales tumbled 1.9%, although profit margins edged higher as it reduced levels of discounting.
But rising costs ate into profit margins in its food business where takings dropped 0.3%.
M&S insisted closing one in four of its high street stores was needed to get the business back in shape. And it claimed its website was being improved.
Chairman Archie Norman said: “We’re deeply conscious of the fact that our middle name is False Dawn,” referring to previous turnaround plans that fell flat. “I’m convinced that this is a turning point in our history,” Norman insisted.
“Seeing is believing, so just watch this space.”
M&S boss Steve Rowe said: “There are a number of structural issues to address and we are taking steps towards fixing these.”
Despite the drop in sales, the chain grew customer numbers for the first time in five years.
Profits excluding the store closure costs fell 5.4% to £580.9m.
Marks’ share price jumped 5% yesterday but it is still worth less than younger upstarts Ocado and ASOS, and the business risks being demoted from the FTSE 100 in a reshuffle due next week.
Kate Ormrod, lead analyst at industry analyst GlobalData, said: “M&S needs to show more commitment to radically streamlining its clothing offer, removing product repetition and making its ranges easier to shop.”