Clothing yet again proved to be the thorn in Marks & Spencer’s side as profits for the third year in a row fell despite continued progress in its food department.
The department store on Tuesday announced a 4 per cent drop in underlying pre-tax profits to £623 million for the year to the end of March. This was driven by a 1.4 per cent fall in like-for-like general merchandise sales, where M&S has continually struggled in recent years with its clothing sales. Like-for-like food sales were up by 1.7 per cent, resulting in a 0.2 per cent increase in UK like-for-like sales overall.
Speaking on Tuesday, chief executive Marc Bolland said the results showed “early signs of improvement” in its general merchandise division, and confirmed that capital expenditure will fall to between £500 million and £550 million, with profit margins also on track to improve.
Bolland said: “We are focused on improving our performance in general merchandise and were pleased to see early signs of improvement. Our food business had a very strong year, consistently outperforming the market.”
The results mark the end of Bolland’s three year plan to turn M&S into an international multichannel retailer, despite lagging sales in its clothing division. It’s now thought Bolland, along with the rest of the management team, will miss out on their bonuses this year due to the retailer’s lacklustre annual figures.