Marks & Spencer profit rise, revenue falls amid store closures
UK retailer Marks & Spencer has seen its profit rise alongside dropping revenue during the first half of its 2019 financial year, amid the closure of 24 Clothing & Home stores as part of an ongoing plan to shutter 100 stores by 2021.
Group revenue decreased by 3.1 per cent to £4.9 billion ($8.81 billion), compared to £5.1 billion ($9.17 billion) during the first half of 2017, while profit after tax rose 6.1 per cent to £89.8 million ($161.5 million) from £84.6 million ($152 million).
“We are on track to restructure our store portfolio with over 100 full-line closures and expect to see newly remodelled stores open next year,” Marks & Spencer chief executive Steve Rowe said.
“We are fixing the basics of our online channel and there are very early signs of improvement. Every aspect of our ranges, how we trade, our supply chain and marketing is undergoing scrutiny and change.”
The business said it is transitioning toward a leaner operational structure, having sliced around 500 roles from regional management.
Revenue across the group’s Clothing & Home brand fell by 2.7 per cent to £1.7 billion ($3.06 billion), from £1.75 billion ($3.15 billion) this time last year, impacted by the store closures.
The brand’s online sales grew “ahead of market” to 20.4 per cent of UK sales, a growth of 9.1 per cent, though technology and supply chain resilience is noted as a known issue.
Food revenue also decreased by 0.2 per cent, while like-for-like revenue down 2.9 per cent, affected by the timing of the Easter period and a reduction in promotions and price investment.
Looking toward the remainder of the year Marks & Spencer notes it expects little improvement in sales trajectory, with full year guidance unchanged.
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