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M&S in recovery as profits soar M&S in recovery as profits soar
(about 1 hour later)
Marks & Spencer has completed its recovery from a failing brand to a powerhouse of fashion.Marks & Spencer has completed its recovery from a failing brand to a powerhouse of fashion.
Britain's iconic retailer has posted a 28.5% increase in annual pre-tax profit to £965.2m - not far off the record £1bn it saw in 1998 before its decline.Britain's iconic retailer has posted a 28.5% increase in annual pre-tax profit to £965.2m - not far off the record £1bn it saw in 1998 before its decline.
The company's staff will share a bonus of £90m, including £26m for customer assistants, the company said. But comments that the retail market was becoming "more challenging" as rate hikes bite prompted fears that future growth of the brand will stall.
M&S also said it is to create 10,000 jobs in the UK over the next three years as store expansion continues. Shares in M&S fell 2.51% in morning trade to 720p.
Food and clothing
The strong performance was driven by increased demand of M&S food and clothing, which was supported by a popular advertising campaign featuring 1960s model Twiggy, singers Myleene Klaas and Brian Ferry and other well-known faces.The strong performance was driven by increased demand of M&S food and clothing, which was supported by a popular advertising campaign featuring 1960s model Twiggy, singers Myleene Klaas and Brian Ferry and other well-known faces.
'Innovation and newness'
The company wll reward its staff for helping revive the M&S brand with a bonus of £90m, including £26m for customer assistants.
"We continue to improve our product ranges, offering customers better quality, value, innovation and newness," said chief executive Stuart Rose."We continue to improve our product ranges, offering customers better quality, value, innovation and newness," said chief executive Stuart Rose.
"Service standards have improved. We continue to invest in modernising our stores and 70% of our store portfolio will be modernised by the end of the year."
A series of high-profile advertising campaigns helped rejuvenate M&S
The former Arcadia boss is widely credited for turning around the company's fortunes when he took over in 2004, saving M&S from a takeover from millionaire entrepreneur and Arcadia owner Philip Green.The former Arcadia boss is widely credited for turning around the company's fortunes when he took over in 2004, saving M&S from a takeover from millionaire entrepreneur and Arcadia owner Philip Green.
Strong sales class="" href="http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/shares/3/23190/default.stm">See live M&S share price
The company's recovery has been driven by strong sales growth. M&S reported a 6.1% increase in underlying UK sales, with new stores stripped out, and in 240 stores overseas, sales were up 16.8%.
M&S reported a 6.1% increase in underlying UK sales, with new stores stripped out.
As a result, the company increased its market share in both food and clothing.As a result, the company increased its market share in both food and clothing.
It now has 11.1% of the UK clothing market, an increase of 0.7%, while its food market share rose 0.2% to 4.3%.It now has 11.1% of the UK clothing market, an increase of 0.7%, while its food market share rose 0.2% to 4.3%.
Mr Rose cautioned the retail environment would become "more challenging" with increased competition and added pressure on consumer spending as a result of interest rate rises, but he expected progress at the company to continue. M&S hopes its planned expansion and an extensive refurbishment programme - 70% of stores are expected to be remodelled by Christmas - will boost sales further.
It also plans to create 10,000 new jobs created in the UK over the next three years.