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Marks & Spencer profits plunge as clothing sales continue to fall | Business


Marks & Spencer has reported a fresh slump in clothing sales but insisted it was “making up for lost time” in the run-up to the key Christmas trading period.

The chief executive, Steve Rowe, blamed the 5.5% decline in like-for-like clothing sales in the first six months of its financial year on supply chain problems and buying errors that meant popular sizes quickly sold out in store and online. This contributed to a disastrous performance from its website, where sales barely grew – an outcome it admitted was “less than planned”.

Rowe said: “We are making up for lost time. We are still in the early stages but we are clear on the issues we need to fix and, after a challenging first half, we are seeing a positive response to this season’s contemporary styling and better-value product.”

Last month Rowe told analysts the revamp of its clothing business was “18 months” behind schedule and he was still trying to fix “the basics”. Jill McDonald, its clothing boss, was ousted in the summer after buying mistakes before a jeans promotion left it with empty rails for a month. While maintaining its crown as the UK’s largest clothing retailer, sales at the high street giant have been falling for eight years.

There was a stronger performance from M&S’s food halls, which returned to growth over the period, with like-for-like sales up 0.9%. The retailer has cut the price of hundreds of everyday products and introduced new ranges in a bid to be seen as a supermarket rather than a convenience chain.

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Like Mothercare, which yesterday said it was closing its loss-making UK chain, M&S is facing an existential crisis as it struggles to compete with cheaper rivals such as Primark and the rise of online shopping. As part of its fightback plan, the retailer is closing 120 full-line stores, which sell clothing and food under one roof, and has struck a deal with Ocado, which will result in the online grocer carrying products from M&S rather than Waitrose from next year.

M&S reported a 17% decline in pre-tax profits (before one-off items) of £176.5m on sales of £4.9bn. M&S said the store closures would reduce clothing sales by 2% rather than the 3% previously thought but warned that its profit margins would come under pressure in the second half.

After almost two decades of failed attempts to revive the high street giant, Rowe and the retail veteran Archie Norman, who joined as chairman in 2017, are the latest management team to try to reinvent the retailer. Their boldest step to date has been the partnership with Ocado. However, there are signs that all is not going to plan with Humphrey Singer, its finance director, leaving at the end of the year. The recent collapse in its share price has also cost the retailer its place in the prestigious FTSE 100.



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