Marks & Spencer posts first loss in firm’s history
Marks & Spencer posted its first loss in 94 years as a publicly listed company as clothing sales collapsed due to the coronavirus crisis.
The high street stalwart reported a £87m pre-tax loss for the first half of the year.
In the same period last year it made a profit of £158.8m in the same period.
Despite the loss, shares in M&S rose 4.3 per cent as trading began this morning.
As a result of the lockdown in the spring, clothing sales fell 40 per cent across the first half.
Chief executive Steve Rowe said that the disruption had enabled M&S to make three years worth of change in a single year.
“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”, he said.
Back in August the firm said that it would cut 7,000 jobs in the period up to the end of the year.
Group revenue dropped 15.8 per cent over the six-month period, from £4.9bn to £4.1bn.
Richard Hunter, head of markets at Interactive Investor, said that M&S had “ground to recover” on its competitors.
“There is little doubt that a reorganisation of the company and, to some extent the brand, is long overdue. Whether the speed of this transformation is too little, too late remains to be seen, but M&S is making every effort to stem what has been a slow decline over recent years”, he added.
He did however point out that the department store’s new partnership with Ocado, which launched in September, was already bearing fruit.
A 48 per cent in retail revenues from the partnership meant that M&S received a handy £39m.
But the prospect of a second lockdown in the build up to the lucrative Christmas period could do further damage to the firm.
Rowe told reporters this morning that M&S was lobbying the government to extend Sunday trading hours in December to help make up for lost sales in November.
“We are lobbying quite hard with the rest of the industry for the extension and de-regulation of some Sunday hours, particularly as we get closer to Christmas”, he said.
Fast fashion chain Primark said it was doing the same yesterday.
Yesterday M&S confirmed that it had completed the rollout of online delivery slot reservation system across all of its stores.
The new system has been extended to all of M&S’s 566 food stores following successful trials amid increased coronavirus restrictions in Scotland and Wales.