Marks & Spencer could be hit by up to £47 million in Brexit costs

Workers in Marks & Spencer stores across Ireland voted in favour of industrial action

Retailer says it remains committed to keeping a presence in Ireland

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1 June 2021 | 0

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Marks & Spencer expects to incur between between £42 million (€49 million) and £47 million in Brexit costs for the current year, with a particular impact upon its business in the Ireland.

However, chief executive Steve Rowe has said the group remains committed to having a presence in Ireland.

The retailer reported an 88% slump in full-year profit, reflecting a collapse in clothing sales due to the Covid-19 pandemic.

While the group has cautioned investors not to expect a dividend this year, it said it was making progress with its turnaround plan. M&S reported it had traded well in the early weeks of the 2021-2022 financial year and that profits would recover, resulting in its beleaged shares shooting up more than 4% in early trading, The Irish Times reports.

M&S made a pretax profit before one-off items of £50.3 million in the year to 3 April, down from the £403.1 million made in 2019-20. Like-for-like clothing and homeware sales plummeted by 31.5%, as a result of shuttered stores during lockdowns. Although in food, like-for-like sales rose 1.3%.

On a statutory basis M&S sank to a pretax loss of £209.4 million, versus a profit of £67.2 million in 2019-20.

Steve Rowe has been leading M&S’s latest attempt at a reinvention. Alongside chairman Archie Norman he has focused on transforming the company’s culture, while closing stores, investing heavily in technology and ecommerce, and improving product and value. According to M&S, its progress has moved beyond the “fixing the basics” stage.

“We now have a clear line of sight on the path to make M&S special again,” Rowe said. “The transformation has moved to the next phase.”

M&S said trading for the first six weeks of the 2021-22 financial year had been ahead of the comparable period two years ago and its central expectations. The retailer forecast underlying pretax profit to recover to £300-350 million in 2021-22.

 

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