Marks & Spencer has swung to a H1 loss in a difficult year marked by Covid-19-related store closures.
For the six months ended 26 September, loss before tax at the British retail giant was 87.6 million pounds compared to a profit of 158.8 million pounds in the same period last year.
Group revenue was “better than expected”, falling 15.8 percent to 4 billion pounds, outperforming the company’s Covid-19 planning scenario by 22.8 percent.
The retailer’s clothing and home department was hit particularly hard by store closures and ongoing social distancing measures. Total revenue for the category plummeted 40.8 percent in the first half, comprising a decline of 61.5 percent in Q1 and 21.3 percent in Q2.
That was slightly offset by a 34.3 percent increase in online revenue during the first half, driven by strong traffic, increased conversion and lower returns.
Marks & Spencer H1 performance 'more robust' than expected
Since stores were reopened in the second quarter, the business said it “still had substantial headwinds to deal with in the form of a store estate generating two-thirds of sales in high streets, shopping centres and town centres and a product mix in which formal, outerwear and event-related categories accounted for around one quarter of sales last year”.
“In a year when it has become impossible to forecast with any degree of accuracy, our performance has been much more robust than at first seemed possible,” CEO Steve Rowe said in a statement. “This reflects the resilience of our business and the incredible efforts of my Marks & Spencer colleagues who have been quite simply outstanding.”
Rowe continued: “But out of adversity comes opportunity and, through our Never the Same Again programme, we have brought forward three years change in one to become a leaner, faster and more digital business. From launching Marks & Spencer food online with Ocado to establishing an integrated online business division ‘MS2’ to step-change growth, we are taking the right actions to come through the crisis stronger and set up to win in the new world.”
Photo credit: Photo credit: Marks & Spencer