Following yesterday's news that Marks and Spencer Group plans to accelerate its store closure programme to close some 25% of its legacy Clothing & Home outlets, the retailer has published its results for the year ended 31st March 2018.
Profits before tax were down -62.1%. Significant adjusting items affecting this – including £321.1m for the UK store estate closure programme – totalled £514.1m.
Group revenue was down -0.7%. Of this, Clothing & Home revenue was down -1.4%, which the retailer has attributed to the planned removal of two clearance sales, and unseasonal second-half trading conditions.
Meanwhile, UK costs rose +1.8% due to new space, inflation and channel shift.
Steve Rowe, Marks & Spencer CEO, says: “At our half-year results in November I outlined the need for accelerated change at M&S. The first phase of our transformation plan, restoring the basics, is now well under way, and the actions taken have increased the velocity of change running through our business. These changes come with short-term costs which are reflected in today’s results.
“There are a number of structural issues to address and we are taking steps towards fixing these. The new organisation will largely be in place by July and the team is now tackling transforming our culture to make M&S a faster, lower cost, more commercial, more digital business. This is vital as we start to leverage the strength of the M&S brand and values across a family of businesses to deliver sustainable, profitable growth in three to five years.”
The retailer admits that its supply chains require significant upgrades, and that its customer base has narrowed, causing it to lose share among younger family-age customers and larger households. To help remedy this, in Clothing & Home the retailer plans to reduce the number of lines and phases it offers, buying "more stylish product in greater depth and emphasising value".