LONDON — Marks & Spencer PLC is on a roll, and apparel is supplying the momentum.
This story first appeared in the November 6, 2002 issue of WWD. Subscribe Today.
First-half net income at the U.K. retailer rose 37 percent to $300 million, or 13 cents per diluted share, on sales of $5.54 billion, a 7.9 increase over the corresponding period last year.
The company, which underwent a dramatic restructuring that ended last year, also registered its fourth consecutive quarter of growth.
U.K. retail was the driving force behind sales growth in the 26 weeks ending Sept. 28. Overall, retail sales grew 9.5 percent to $4.8 billion. Dollar figures have been converted from the pound at current exchange rates.
Apparel, which generates the lion’s share of sales, grew 14.4 percent, followed by the home collection, which grew 10 percent, and food, which rose by 5 percent. The company said the growth in clothing was due to higher average selling prices, reflecting the mix of products sold.
“In clothing, we have continued to improve the appeal, quality and fit of our merchandise as well as segmenting our ranges more clearly,” said chief executive Roger Holmes. “The focus on key product areas, together with recently developed categories including Per Una and Blue Harbor, has been well received by our customers.”
Marks & Spencer now boasts 10.9 percent share of the U.K. clothing market. Chairman Luc Vandevelde said the store would continue to focus on gaining market share in core areas, although he reiterated that Marks & Spencer expects the market to be “less buoyant” in the coming months.
Operating profit for the U.K. retail business rose 60.1 percent to $354 million and overall rose 41.1 percent to $460 million. The company said the sharp rise in operating profit was due to a variety of factors including changes in its supply chain and a more profitable lingerie business.
The company said it refurbished 63 stores during the period at a cost of approximately $48 million. It plans to restore 41 more stores before Christmas. That means 89 percent of U.K. retail selling space will be refurbished by the end of the year.