M&S suffers first loss in 94 years
M&S’s first half results to 26 September show sharp falls in clothing and homeware sales after non-essential retail was shut during the first coronavirus lockdown.
Clothing and home sales at M&S fell 21.3% in the second quarter. This followed a first quarter decline of 61.5%, leaving the business almost 41% down over the six months.
However, food and online sales mitigated some of the damage.
Food adjusted operating profit was up 19% as the group cashed in on hospitality closures. The wider M&S food operation – exempt from lockdown restrictions – recorded 2.7% growth in comparable sales.
The partnership with Ocado also contributed £38.8m to net profits on the back of a 48% rise in sales amid strong demand for grocery deliveries during lockdown.
Steve Rowe, M&S chief executive officer, said: “In a year when it has become impossible to forecast with any degree of accuracy, our performance has been much more robust than at first seemed possible.
“This reflects the resilience of our business and the incredible efforts of my M&S colleagues who have been quite simply outstanding. But out of adversity comes opportunity and, through our Never the Same Again programme, we have brought forward three years change in one to become a leaner, faster and more digital business.
“From launching M&S Food online with Ocado to establishing an integrated online business division ‘MS2’ to step-change growth, we are taking the right actions to come through the crisis stronger and set up to win in the new world.”
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Clothing continues to struggle but the retailer aims to drive an express train of transformation through its ranges by creating a new digital division ‘MS2’.
“The plan is to create product lines to grab social media attention and drive shoppers to online, where Marks and Spencer have historically struggled to keep up with the competition. Clothing rebrands have been and gone at the retailer before, and bosses will have to work very hard to ensure this time around the new styles really do stand out from the fashion pack.”