Britain's M&S sees profit fall for second straight year

Out with the old in with the new

The latest wave of closures will affect M&S clothing and home stores, which have underperformed for years.

Marks & Spencer (M&S) today announced that it has dropped prices on 200 food lines in its "biggest ever" price investment in the Republic of Ireland.

Profit before tax and adjusting items was down 5.4 per cent to £580.9 million from £613.8 million the year before.

The move, which has been touted as part of a "radical transformation" plan by the retailer after years of falling sales, represents a "dramatic retreat from the United Kingdom high street that will trigger thousands of job losses" says The Guardian.

Britain's Marks & Spencer on Wednesday reported a 5.4 percent fall in full-year profit, a second straight decline, hurt by a weakening in the food profit margin.

As of the end of March, the retailer had 1,035 United Kingdom stores, made up of 300 clothing, home and food stores, 696 food-only stores and 39 outlets.

"For investors a dividend yield of over 6% is an attractive stopgap, but at the moment Steve Rowe's promise to make M&S special again requires a leap of faith", said Laith Khalaf, senior analyst at Hargreaves Lansdown.

"We have been clear about our plans to accelerate our store closure program and the action we must take to build a business with sustainable, profitable growth", an M&S spokesperson said.

The retailer's troubled clothing arm saw like-for-like sales fall by 1.9 per cent in the year.

Clothing & Home revenue fell 1.4 percent to 3,741.1 million pounds for the 52 weeks to March 31, 2018, with like-for-like revenue down 1.9 percent.

"These, together with a challenging United Kingdom consumer market, mean that we have to modernise our business to ensure we are competitive and reignite our culture".

"The new organisation will largely be in place by July and the team is now tackling transforming our culture to make M&S a faster, lower cost, more commercial, more digital business".

Sacha Berendji - retail, operations and property director at M&S - said "we are making good progress with our plans to reshape our store estate to be more relevant to our customers and support our online growth plans".

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