UK food and clothing retailer Marks & Spencer has reported lower profits for the first half, and announced management changes as it tries to turn around its business.
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The company reported group profit before tax and exceptional items of £292.7m (US$541.9m) for the 26 weeks to 2 October, compared to £325.1m a year earlier. Interim operating profit was £242.2m, compared to £353.1m in the year-ago period.
Total turnover rose to £3.82bn, compared to £3.79bn a year earlier; however, UK retail sales slid 0.4% to £3.3bn. International retail sales rose 1.4% to £321.0m.
In its food business, sales excluding VAT were up 3.2%, although like-for-like sales were down 2.1%. The company said its offer is too complicated with too many sub brands and too much product proliferation, and its performance varies significantly between stores.
“We are addressing issues of ranging, availability, waste, markdowns, promotions, and pricing. We are also focusing on the environment of our food offer: Simply Food is being simplified from five different formats to two,” the company said.
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By GlobalDataIn May, the company appointed a new chief executive, Stuart Rose, to help turn around the ailing retail group. Today [Tuesday], Rose announced a number of management changes and said he would take direct responsibility for retailing, merchandising and buying.
Among those senior executives to leave the company is Alison Reed, finance director, who is to step down by mutual agreement in February 2005; a search for a new finance director is underway. Anthony Thompson is to become director of retail and Keith Cameron is to join as human resources director. A search is underway for an external candidate to become director of food; in the meantime Guy Farrant is to continue as food trading director and interim director of food.
Marks & Spencer also issued a trading update, saying trading has become more difficult since it last gave an update on 12 October.
“However, we do not believe this trend to be entirely Marks & Spencer specific. With Christmas, we still have our two key profit driving months ahead. It is therefore too early for us to predict the outcome for the second half at this stage,” the company said.
