Yesterday, UK high street retailer Marks & Spencer reported falling profits for the third year in a row. The company has made a paltry £145m (US$466.9m) in the past year, a far cry from the halcyon days when it posted record profits of £1.2bn. The new figures for the past year reveal a £272.m decline that it largely attributed to one-off charges amounting to £335m. These include the plan to withdraw the UK mail order business and the costs involved with the closure of most of the group’s continental European stores, with the loss of 4,400 jobs.

Net profit before exceptional items plummeted 14% to £328.2m (£379.4m), while pre-tax profit fell in line with net profit from £557.2m to £480.9m. Sales eased off 1.5% to £8.08bn (£8.2bn).

An important note for readers of, however, is that the different operating divisions performed variably. Core sales of clothing and general merchandise fell 6.3% disguising vigorous food sales, which actually rose 2.6%. Indeed, chairman Luc Vandevelde said that focus would be increased on food, health and beauty items. It is thought that the popular food division had also been performing well overseas, although the company did not comment on how European closures were expected to affect food sales.

Vandevelde admitted the figures were far from acceptable but insisted the group would turn the corner. He predicted that ‘pockets of success’ would be in evidence by this time next year, although he refrained from making more ambitious claims.

Part of the measures he is implementing in an attempt to “stop the rot” is a shift from the group’s central London HQ, where it has reined supreme for 44 years, to new office space in Paddington. The new office only has space for 2000 employees, compared with 3000 at Baker Street, leading to suspicions that further staff will be cut. This would batter a workforce that has already shrunk by 4,390 jobs following the closures in Europe and on the mail order side.

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