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Marks & Spencer profits fall again Marks & Spencer profits fall again
(35 minutes later)
Profits at Marks & Spencer have fallen for the second year in a row as its much maligned womenswear divison continued to disappoint.Profits at Marks & Spencer have fallen for the second year in a row as its much maligned womenswear divison continued to disappoint.
UK sales fell 1% overall, dragged down by a poor performance in general merchandise, which dropped 4.1% on a like-for-like basis.UK sales fell 1% overall, dragged down by a poor performance in general merchandise, which dropped 4.1% on a like-for-like basis.
The results could have been worse had it not been for a 4.5% rise in international sales and a 16.6% boost in multichannel business. Food was also up 1.7% in the UK.The results could have been worse had it not been for a 4.5% rise in international sales and a 16.6% boost in multichannel business. Food was also up 1.7% in the UK.
Total group sales were up 1% to £10bn, however, pretax profit for the year to end of March fell 5.8% to £665.2m. Total group sales were up 1% to £10bn; however, pretax profit for the year to end of March fell 5.8% to £665.2m.
Chief executive Marc Bolland said: "In a challenging market, M&S sales grew by 1.3%. Three of the four parts of the business made strong progress. The M&S chief executive, Marc Bolland, said: "In a challenging market, M&S sales grew by 1.3%. Three of the four parts of the business made strong progress.
"We are working hard to get the General Merchandise performance back on track. We have already made progress in our operational execution, and our new Autumn/Winter ranges have received a positive reaction." "We are working hard to get the general merchandise performance back on track. We have already made progress in our operational execution, and our new autumn/winter ranges have received a positive reaction."
The new autumn-winter fashion range was launched last week and is being seen as "make or break" for Bolland. The autumn-winter fashion range was launched last week and is being seen as "make or break" for Bolland.
The group's poor performance has led to speculation that Bolland, who joined M&S three years ago, could be under threat and there have also been rumours of a possible takeover by private equity groups.The group's poor performance has led to speculation that Bolland, who joined M&S three years ago, could be under threat and there have also been rumours of a possible takeover by private equity groups.
Analysts were unimpressed with the figures. Bryan Roberts, Kantar director of Retail Insights said he was concerned that "the feted autumn/winter clothing range will not be the silver bullet that some hope it might be". Analysts were unimpressed with the figures. Bryan Roberts, Kantar director of Retail Insights, said he was concerned that "the feted autumn/winter clothing range will not be the silver bullet that some hope it might be".
These concerns were echoed by Freddie George at Cantor Research. He says it will take time before the new womenswear ranges resonate with customers – and possibly up to three seasons before it has any real impact on sales. It will also take time for M&S to attract the younger, freer spending consumers that it needs as its core customer base ages. These concerns were echoed by Freddie George at Cantor Research. He said it would take time before the new womenswear ranges resonate with customers – and possibly up to three seasons before it has any real impact on sales. It will also take time for M&S to attract the younger, freer spending consumers that it needs as its core customer base ages.