Management at Marks & Spencer promised a more stylish future after profits at the high street fixture fell to their lowest level in four years.
Chief executive Marc Bolland said the retail stalwart where pre-tax profits fell more than 14% to £546.3 million in the 12 months to the end of March would improve its fashion ranges as part of “strong progress” on a turnaround plan.
The firm’s clothing division, long criticised by shoppers, saw its performance slip 2.4% in the period, as general merchandise fell 4.1%.
New ranges were launched last week and a new fashion team, led by John Dixon, head of general merchandise brought over from M&S Food, and style director Belinda Earl, the former Debenhams and Jaeger boss, has been charged with “reinvigorating” its offer.
Like-for-like UK sales fell 1%, but the high street staple’s food offer continued to flourish as revenues in the grocery arm rose 1.7%.
Overall group figures improved by 1.3%, buoyed by performance in international markets.
But the result impacted by more than £100m in exceptional charges for restructure and bond movement costs, and losses in the chain’s banking offer fell some way below Mark & Spencer’s heyday. In 2008, underlying profits had topped £1 billion.
Mr Bolland, who was appointed in 2010 and is two years into a three-year plan designed to turn the brand into an “international, multi-channel retailer”, remains under pressure to improve fashion sales.
The company said it had taken “decisive action” to boost its fortunes after clothing revenues fell as much as 5% in the early weeks of last year, though this summer’s sales are likely to be seen as a litmus test of its wares.
“The improvement in product will take time to come through, but our customers will start to see the benefits of the changes from this summer,” M&S said.
Another change at the top was unveiled yesterday as marketing director Steven Sharp retired after nine years, to be replaced by Patrick Bousquet-Chavanne, formerly of Estee Lauder.
Chairman Robert Swannell said the retailer was “building longer-term foundations”, while Mr Bolland said M&S had made “strong progress” in some areas.
He pledged to “bring something that really delights and surprises the customer”.
M&S is targeting profit improvements for the current year, though these are likely to be impacted by the cost of web development, the recent opening of a vast new distribution centre at Castle Donington, and future capital commitments.
Markets had widely anticipated a fall in earnings, and shares closed the day 27.4p higher at 467.9p.
Shore Capital retail analyst Clive Black said there remained a degree of caution about the scope for improvement, but added that M&S was “a valuable brand with upside to come.”