LONDON — Marks & Spencer is set to reveal its half-year results on Wednesday, with an expected 40 million pound fall in profits and more restructuring ahead, one of a host of U.K. retailers that’s struggling to stay alive with fewer stores and ever more robust cost-cutting plans.
The only exception to that rule appears to be Primark.
On Tuesday, British fast-fashion retailer New Look said sales were down 4.2 percent to 656.9 million pounds, although the company swung back to profit in the first half of fiscal 2018-19, posting underlying operating profit of 22.2 million pounds.
The profit came from restructuring, and there is more cost cutting ahead. Having saved 70 million pounds, the company plans to shave a further 8 million in costs in the current year, with more store closures planned.
The company exited China and is now looking to shut up to 98 stores worldwide, up from the 60 previously planned.
“We continue to work hard to accelerate our progress, but we are facing into significant headwinds and uncertainties, including Brexit,” said Alistair McGeorge, the company’s executive chairman.
“Clearly, the wider retail environment remains challenging and we are not expecting that to change anytime soon. However, we are on the right track and continue to drive further efficiencies across the business.”
After bankruptcies, losses and a raft of store closures at former high street stalwarts including House of Fraser, Debenhams and Marks & Spencer, the only retailer that appears to be thrumming with energy is Primark, which also released its year-end results on Tuesday.
The retailer, a division of Associated British Foods, said sales at its retail division Primark were 7.48 billion pounds, 6 percent ahead of last year at actual exchange rates and 5.2 percent ahead at constant currency, driven by increased selling space.
Retail sales accounted for roughly half of ABF’s revenues in the year, with grocery, sugar and agriculture contributing the balance.
Adjusted operating profit for the year ended Sept. 15 was 13 percent ahead at constant currency. On Tuesday, shares in ABF closed up 3 percent to 2.46 pounds.
ABF said Primark performed particularly well in the U.K., with sales up 5.3 percent on last year, with the retailer’s share of the total clothing market increasing “significantly,” the company said.
The company said sell-through of the summer range was strong, and, as a result, markdowns were lower than expected. It said that early trading of the fall range has been “encouraging.”
Sales in Europe were 4.7 percent ahead of last year at constant currency while like-for-like sales fell by 4.7 percent. The company said sales growth was achieved in Spain, Portugal and Germany and was especially strong in France, Belgium and Italy.
The company said it was “very pleased” with its U.S. performance in the second half of this year. Its ninth store in the region opened in Brooklyn in July, and has been trading very strongly.
The company is also succeeding on the social media front with total fashion followers growing to nearly 13 million, up from 10 million last year.
Primark said its social media channels “aim to inspire, and enable its followers to keep up-to-date on all the latest products, create wish lists, receive styling advice and upload outfit posts to Primania,” a photo-sharing page for customers who want to show off how they’ve styled their purchases.