Business World

Monday 11 December 2017

Marks & Spencer expected to report third year in a row of falling profit

Marks & Spencer boss Marc Bolland is expected to report a third year in a row of falling annual profits when the retailer publishes its results tomorrow.

Mr Bolland, who has been chief executive since May 2010, has been under pressure over falling fashion sales at the chain.


Trading figures published last month showed signs of recovery in Marks's clothing arm in the fourth quarter to the end of March.


But underlying pre-tax profits for 2013/14 are still expected to fall by 7.5% to £615 million - their lowest level since 2009, when they were £604.4 million.


The figures look set to confirm that the 130-year-old high street stalwart has seen its earnings overtaken by 32-year-old upstart Next, which earlier this year reported a full-year haul of £695 million.


Marks had seen its profits top £1 billion before the recession and Mr Bolland has hired new personnel and launched a celebrity-backed marketing push to try to revive its dwindling fortunes.


He told investors last year that the prospect of better returns within the next year was no "fairytale".


Latest quarterly figures showed a pick-up in clothing, as like-for-like sales rose 0.6%, though the wider general merchandise division saw a 0.6% decline, extending a three-year run of falls.


Mr Bolland said that within fashion, the performance of womenswear had shown "clear signs of improvement".


Marks has seen a better trend in its food sales, with like-for-like performance 0.1% ahead in the fourth quarter despite being negatively impacted by the later timing of Easter this year.


Its wider strategy is to transform itself into an international, multi-channel retailer and earlier this year it overhauled its website as part of plans to create an online shopping platform "fit for the future".


Last month it revealed that it was ramping up global expansion plans with aims to open 250 stores over the next few years, setting its sights on fast-growing regions such as India and China as well as opening 20 standalone food outlets in Paris


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