Marks and Spencer has announced a 17% drop in profits to £176.5m for the first half of the financial year, with continued slumps in clothing sales affecting the high street giant.
The first six months of the financial year saw a decline of -5.5% in like-for-like clothing sales, despite the prediction of a 4.3% fall. Total sales fell by 2.1% to £4.86b.
The retail giant blamed poor clothing sales on “supply chain issues” and a “shape of buy that remained too broad”. It acknowledged that their clothing sector has “historically been too slow to market”, whilst issues with restocking have also played their part in the slump.
M&S said it remains “optimistic for the future”, however. Steve Rowe, chief executive of the company, said: “We are making up for lost time. We are still in the early stages but we are clear on the issues we need to fix and, after a challenging first half, we are seeing a positive response to this season’s contemporary styling and better-value product.
“We have taken decisive action to trade the ranges with improved availability and shorter clearance periods.”
He added: “In some instances dramatic sales uplifts in categories where we have restored value, style and availability illustrate the latent potential and enduring broad appeal of our brand.”
Whilst clothing sales illustrated a weak performance for the company, food sales have been “outperforming the market”. M&S food halls have seen solid growth over the financial period, with like-for-like sales up by 0.9%.
Food sales also benefited from increasing price cuts, as well as the introduction of new food ranges to high street sites. A joint venture with Ocado has given further hope to food sales after M&S bought 50% of its business earlier this year.
Despite the slide in profits, company shares were up 6.3% at 193.94p, according to FTSE 250 trading this morning.
The company was relegated from the FTSE 100 index in September of this year, marking the first time it had not been a member since the launch of the index in 1984.