Shares in Marks & Spencer, one of the great names in the world of retailing, today shrugged off a 62.1 per cent full-year profits crash, reflecting the costs of a sweeping programme of store closures.
The stock climbed 11.3p, or 3,89 per cent, in early trading in London to reach 303.15p, perhaps partly as in relief that the total dividend pay-out for the year, at 18.7p, was unchanged on the previous year.
Steve Rowe, M&S chief executive, said the first phase of the company’s transformation plan “is now well under way” and the management had “increased the velocity of change running through our business”.
But, he added, these changes come with short-term costs that are reflected in today’s results.” The store-closure programme put a £321.1 million dent in the figures, which cover the year to March 31.
Pre-tax profit plunged from £176.4 million in the year to March 2017 to £66.8 million.
On-line offering lags competitors
On some measures, M&S has been drifting since the late Nineties, when a sudden sales collapse ended a golden period during which its formula of good quality clothes, food and homewares seemed to have been successfully exported to France and Germany.
Since then, as M&S put it today, headwinds have included “the continued migration of clothing and home [wares] on-line, the development of global competition, the growth of home delivery in food and the march of the discounters”, adding: “These, together with a challenging UK consumer market, mean that we have to modernise our business to ensure we are competitive and re-ignite our culture.
Central to this change is a programme of store closures that will see 100 shops disappear by 2022. About 25 per cent of retail space devoted to clothing and homewares will go.