Marks & Spencer’s revenues grow, as turnaround strategy takes shape – WWD
LONDON – British retailer Marks & Spencer is starting to see its fortunes turn.
In its latest business update, the company reported that in the first half of 2021, revenue reached Â£ 5.1 billion, an increase of 5% from 2019, while profit before taxes and items of business adjustment were Â£ 269.4 million. In 2020, the company recorded a loss of Â£ 17.4million, while in 2019 profit before taxes and adjustment items stood at Â£ 176.3million.
Much of the growth came from the company’s food business, where sales rose 10 percent following a partnership with leading UK online food retailer Ocado.
Its clothing and home departments are also picking up steam, with online sales increasing 60% during the UK’s lockdown in the first half of the year and full-price sales by 17% in the six months to October 2021. .
M&S said the increase in sales is the result of easing bottlenecks and the company’s turnaround strategy, including redesigning its food business and focusing on improving ‘value perception’ and the omnichannel approach to the clothing category.
The company said it has also reduced the clothing inventory by more than a quarter to create a “more focused base line.” It is also moving away from the âintensive promotions of the pastâ for personalized discounts for its most loyal customers.
CEO Steve Rowe remains cautious, adding that the effects of Brexit and the pandemic will continue to impact the company over the next year.
âGiven the history of M&S, we have been clear that we will not claim too much of our progress. Unwrapping the numbers is not a linear exercise and we have called the tailwinds of COVID-19, as well as the headwinds of the pandemic, supply chain and Brexit, some of which will continue into next year ” , did he declare.
âBut, thanks to the hard work of our colleagues, it is clear that the underlying performance is improving, with our core businesses realizing significant gains in market share and customer perception. The hard yards of long-term change are beginning to show in our performance. “
There are also 20 new physical stores in the works, including six former sites of the late Debenhams.
Analysts were also positive about the company’s progress: âDespite clothing and housewares shortages that could last until spring, retail giant M&S ââreported strong interim financial results, exceeding expectations analysts. Obviously, the underlying performance of the company is improving and the efforts of the management team are starting to show, âsaid Neil Shah, director of research at Edison Group.