Marks & Spencer posts strong results amid tough trading conditions
Marks & Spencer posts rise in first-half profit for the first time in four years, with its food business performing better than the clothing division
10 November 2014
Marks & Spencer posted a rise in first-half profit for the first time in four years, as cost cutting and rising food sales offset a disappointing few months for clothes sales due to the unseasonably warm weather. Shares in Britain’s biggest clothing retailer were down 17% over the last year but jumped more than 8% early this month as the group raised its profit margin forecast for non-food products.
M&S’s food business, which contributes over half of group sales, is performing better than clothing, benefiting from its strategy to focus on quality and innovation.
Overall, an improvement in women’s clothing helped M&S post the first rise in first-half profit in four years although analysts said it was too soon to declare a turnaround.
Chief executive Marc Bolland said the revamped ranges had won praise in the fashion press and drawn female shoppers back to stores.
According to Stephen Springham, senior retail analyst, Planet Retail: “There is evidence to suggest that the business is slowly sharpening its promotional activity and achieving a healthier margin mix as a result. But continuing to do so in the run up to Christmas, after such a slow start to the festive season, will prove much more challenging – a real test of nerve and mettle.”
The British retail giant announced the closure of four stores in Ireland last year as well as 180 job cuts as it moved to slash costs.