London Daily

Focus on the big picture.
Saturday, May 31, 2025

M&S suffers first loss in 94 years as clothing slumps

M&S suffers first loss in 94 years as clothing slumps

Marks & Spencer sank to the first loss in its 94 years as a publicly-listed company as the coronavirus crisis hit trading.

In the six months to 26 September, the retailer made a loss of £87.6m, compared with profits of £158.8m in the same period last year.

But chief executive Steve Rowe said the firm's performance had been "much more robust than at first seemed possible".

In August M&S announced it was set to cut 7,000 jobs over three months.

Sales for the six-month period across the group slid by 15.8% to £4.09bn - largely impacted by lower clothing and home sales.

Clothing sales in particular were dented by lockdowns and the desire for more casual clothes, the firm said. Between July and September, clothing sales in its city centre stores, for example, were down by 53%.

However, M&S does anticipate that demand for more formal clothes and occasion-wear will return, it said in a statement.

Catherine Shuttleworth, retail analyst and chief executive at retail marketing agency Savvy, told the BBC: "Marks and Spencer is committed to the High Street, but that comes at an enormous cost.

"Its 600 stores were closed [during lockdown], they've picked up on online and online sales are stronger than they've ever been. But that in no way covers the amount of sales loss they've covered this year."

"You've got to change to survive. While Marks was saying it, they weren't necessarily doing it, but it has now changed the way they work even at a simple level."

Ocado tie-up


The group also reported strong growth in its Ocado Retail joint venture, which started delivering M&S food as the start of September.

It said the partnership has reported a 47.9% jump in sales, while profitability has also improved.



M&S created over 750 new lines including in grocery and homecare to broaden its appeal on the Ocado platform, which previously delivered for Waitrose.

M&S was one of the few big food retailers without its own internet-based delivery service, and the tie-up with Ocado had been described as a key moment in the retailer's shift to online.

Julie Palmer, partner at Begbies Traynor, said that M&S "is already reaping the rewards of an excellent partnership with Ocado.

"Its food business could benefit from the forthcoming national lockdown [in England] as consumers look for high-quality meals as an alternative to going out.

"This could help it counter the effects of fewer people grabbing a sandwich while nipping out of the office for lunch," she said.

M&S also said its grocery business had performed "strongly" over the half-year, with like-for-like sales rising by 2.7% on the back of substantial growth from its Simply Food stores.

Ms Palmer added: "M&S has an opportunity to step up and sit at the table with the big players in the retail market once more, but to stake its claim, it can't just bring food to the party, it has to dress better and provide the furniture too."



Recovery signs


Detractors have often described M&S as the lame duck of UK retail, forever struggling to reinvent itself quickly enough to keep up with changing consumer tastes. Its current management, however, will hope that this set of results will persuade investors that a more apt comparison would be with another bird, the phoenix.

Today's loss is the ashes from which the management hopes a new, slimmed-down and digital-savvy M&S will emerge.

Steve Rowe talks of the pandemic having forced the company to compress three years' of changes into a single year - a hint, perhaps that the crisis may have come by chance at a good time in his plan to revive the company's fortunes.

There are signs that the big bet on a commercial alliance with Ocado is paying off, but the Achilles heel remains weak sales in clothing and general merchandise. M&S shares were up more than 4% in early trading, suggesting that investors may discern the first flaps of the phoenix's wings.

The update came as M&S continues to push forward with its transformation strategy. The plans, which saw M&S announce 7,000 job cuts across stores and management in August, will enable the business to emerge from the crisis in a "stronger, leaner and more focused position", the firm said in a statement.

The half-year results included a £92m exceptional cost reflecting these cuts. The group said it would also see further charges of up to £120m due to store closures over the next seven years.

In a call with journalists, Mr Rowe said: "My goal remains unchanged - that is to deliver the long-term transformation for M&S, building a brand that is more digital in a world that will never be the same again."

"We know the challenges we're facing will continue," he added, citing the upcoming lockdown in England, but said the firm was in a "much better position" as the key Christmas trading period approaches.

Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
Labour MPs Urge Chancellor to Tax Wealthy Over Cutting Welfare
Publication of UK Child Poverty Strategy Delayed Until Autumn
France Detains UK Fishing Vessel Amid Post-Brexit Tensions
Calls Grow to Resume Syrian Asylum Claims in UK
Nigel Farage Pledges to Reinstate Winter Fuel Payments
Boris and Carrie Johnson Welcome Daughter Poppy
×