High Street juggernaut Marks & Spencer has seen its profits before tax slump by 19.5 per cent in the 52 weeks to 26 March, despite posting a small 0.8 per cent rise in revenues to £10.4bn.
The veteran retailer took a hit principally from its international business, which endured a 39.6 per cent fall in operating profits to £55.8m courtesy of ‘difficult’ trading conditions and an ‘unsatisfactory’ performance at its all-important clothing and home division.
Moreover the retailer expects to see such underperformance continue in the near term as it pumps resources into its clothing and home sectors in a bid to turn them around.
Steve Rowe, Chief Executive, said: “We continued to outperform on food but we underperformed on clothing & home sales. This is not satisfactory and today we are outlining our initial plans to address the issues and to position Marks & Spencer to deliver profitable sales growth.
“We are clear on the actions needed to recover and grow Clothing & Home, which is our top priority; to continue to grow our Food business; and to focus on driving profitability. We are investing to re-establish our price position by sharpening prices and to enhance service by putting more employees into our stores.
“These actions, combined with the difficult trading conditions, will have an adverse effect on profit in the short term.”
The one saving grace for M&S remains its food business which continues to enjoy strong growth in a cutthroat sector, courtesy of the opening of 75 Simply Food stores.