LONDON — British retailer Marks & Spencer is starting to see its fortunes turn.
In its latest trading update, the company reported that in the first half of 2021 revenues rose to 5.1 billion pounds, a 5 percent increase compared to 2019, while profits before tax and adjusting items were 269.4 million pounds. In 2020, the company had made a loss of 17.4 million pounds, while in 2019 profits before tax and adjusting items were at 176.3 million pounds.
Much of the growth came from the company’s food business, where sales were up 10 percent following a partnership with major U.K. online food retailer Ocado.
Its clothing and home departments are also picking up steam, with online sales growing 60 percent during the U.K. lockdown in the first half, and full-price sales up 17 percent in the six months to October 2021.
M&S said the sales uptick is a result of the easing of lockdowns and the company’s turnaround strategy, including reshaping its food business and focusing on improving the clothing category’s “value perception” and omnichannel approach.
The company said it also reduced the amount of clothing stock by over a quarter to create a “more focused, core range.” It is also moving away from the “intensive promotions of the past” to personalized discounts for its most loyal clients.
Chief executive officer Steve Rowe remains cautious, adding the effects of Brexit and the pandemic will continue to impact the business in the next year.
“Given the history of M&S, we’ve been clear that we won’t over-claim our progress. Unpacking the numbers isn’t a linear exercise and we’ve called out the COVID-19 bounce back tailwinds, as well as the headwinds from the pandemic, supply chain and Brexit, some of which will continue into next year,” he said.
“But, thanks to the hard work of our colleagues, it is clear that underlying performance is improving, with our main businesses making important gains in market share and customer perception. The hard yards of driving long-term change are beginning to be borne out in our performance.”
There are also 20 new physical stores in the pipeline, including six former sites of the now-defunct Debenhams.
Analysts were also positive about the company’s progress: “Despite shortages in clothing and homeware potentially lasting until spring, the retail giant M&S reported strong interim financial results — higher than analyst expectations. Clearly, the firm’s underlying performance is improving and the efforts of the management team are beginning to show,” said Neil Shah, director of research at Edison Group.