High street chain Marks & Spencer has reported a fall in profits for the third consecutive year, according to its latest round of financial figures released today.
The results show a 3.9 per cent fall in underlying annual profit to £623m, like-for-like food sales rose 1.7 per cent, whilst the brand’s general merchandise – including clothing – fell 1.4 per cent.
Marks & Spencer chief executive, Marc Bolland, said the brand was “focused on improving our performance in general merchandise” and reported he was “pleased” by “early signs of improvement”.
Bolland added: “Three years ago, we recognised the scale of investment required to transform our business, investing to strengthen our foundations and improve our customer offer. We are making solid progress on this journey and are now focussed on delivery.”
“Unseasonal conditions” and “high levels of promotional activity” were given as factors for the fall in general merchandise profits, though a return to growth in the category in the final three months of the year was highlighted as a positive.
“Refreshed” womenswear departments in 70 of Marks & Spencer’s “top stores” and the introduction of “new look destination departments” are hoped to continue this growth moving forward.
Of its new online shopping destination M&S.com the brand said it expected a settling in period of around “four to six months” as it would “take time for customers to migrate and get used to the site”. Marks & Spencer revealed that over half (55 per cent) of multi-channel orders are now collected in store or ordered in-store for home delivery.
International business was up 6.2 per cent to £1.15bn with 55 new stores opened in the last year, seeing the brand now trading from 455 stores across 54 territories.
Chairman Robert Swannell commented: “The investment made in executing our strategy over the last three years puts M&S in a stronger position to compete in a retail world undergoing profound change. Our priorities now are to deliver on the investment we have made and to make M&S a more profitable, stronger and well-equipped business.”
M&S.com results saw sales up 22.8 per cent with site visits increasing by nine per cent. Online business accounted for 16 per cent of general merchandise sales, an increase of three per cent from last year. Mobile sales are up 90 per cent with tablet traffic doubling and now accounting for a quarter (25 per cent) of online sales.