This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/business-22605609
The article has changed 5 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Marks and Spencer profits fall as clothing disappoints | Marks and Spencer profits fall as clothing disappoints |
| (about 1 hour later) | |
| Marks and Spencer has reported a big fall in profits, despite rising sales across the group. | Marks and Spencer has reported a big fall in profits, despite rising sales across the group. |
| Pre-tax profits fell to £564.3m, down from £658m last year, despite group sales rising 1.3% to £10bn for the year to 30 March. | Pre-tax profits fell to £564.3m, down from £658m last year, despite group sales rising 1.3% to £10bn for the year to 30 March. |
| While underlying sales of food rose 1.7%, sales of general merchandise - which includes clothing - fell 4.1% in the year. | While underlying sales of food rose 1.7%, sales of general merchandise - which includes clothing - fell 4.1% in the year. |
| Chief executive Marc Bolland described the market as "challenging". | Chief executive Marc Bolland described the market as "challenging". |
| M&S's clothing division, which has an 11% market share in the UK, has been struggling in recent years as sales have fallen. | |
| In April, director of lingerie and beauty Janie Schaffer, who joined M&S from lingerie chain Victoria's Secret, left after just three months in the job. | In April, director of lingerie and beauty Janie Schaffer, who joined M&S from lingerie chain Victoria's Secret, left after just three months in the job. |
| In an effort to address the problem, M&S changed its retail team, bringing in Belinda Earl from Debenhams as head of style, and last week it launched a new autumn/winter clothing collection, which it hopes will win back disaffected customers. | |
| Speaking to BBC Radio 4's Today programme, Mr Bolland said: "We won't duck the fact that we feel we have underperformed in general merchandise. | |
| "We have to improve on quality", he added. | |
| Mr Bolland also defended the company's tax affairs in the wake of controversy over tax avoidance schemes. | |
| There was "nothing fiscal" in the company's use of Ireland as a trading hub for its international e-commerce business, he said, as the country now handles more than 50% of online trade. | |
| "M&S pays UK corporation tax on all the profits generated by UK sales", he said. "We contributed £800m to the UK tax authorities in 2011-12 - the 25th highest tax contributor in the UK." | |
| He maintained that M&S paid more corporation tax than many other FTSE 100 companies of bigger size. | |
| 'Too risk averse' | |
| M&S said that its international sales had risen by 4.5% over the past year. | |
| Multi-channel sales, which include internet shopping, rose by 16.6% and now account for 13% of general merchandise sales. | |
| About 3.6 million people visit the website each week, the company said, while in-store pick-up of online orders was proving increasingly popular. | |
| Retail analysts Conlumino said that although international and online sales were growing, M&S needed to "focus firmly" on its UK business. | |
| "On this 'home front' advancement is a little less encouraging and, in clothing at least, has seemed more like a gentle evolution than a radical reinvention," Conlumino said. | |
| "We still believe M&S is nowhere near ambitious enough on the general merchandise front; in our view the company is too risk averse and is unwilling to break the mould of its traditional ways of doing business." |