LONDON — Citing an “increasingly promotional marketplace,” Marks and Spencer Group plc, Britain’s biggest clothing retailer, said Tuesday that first-half profits fell 4.5 percent to 242.8 million pounds, or $393.3 million, from 254.4 million pounds, or $412.1 million, in the same period last year.
Revenues in the six months to Oct. 1 rose 2.4 percent to 4.68 billion pounds, or $7.58 billion, from 4.57 billion pounds, or $7.4 billion, in the same period last year. All dollar figures have been calculated at average exchange rates for the period. The company’s shares closed down 0.8 percent on the London Stock Exchange Tuesday following the results.
M&S said it performed strongly in food, with sales in the category up 3.9 percent in the half, though general merchandise sales, of which clothing is part, fell 0.8 percent. M&S kicked off its markdown period two weeks earlier than usual, prompted by earlier summer sales on the U.K. high street.
“Sales were ahead of last year despite tough comparatives and a challenging economic environment,” said Marc Bolland, chief executive officer. “In an increasingly promotional environment, we managed costs tightly and took a decision to invest in giving our customers better value, choosing not to pass on the full extent of the increases in commodity prices.”
During the half, M&S invested in new store formats, as part of which it highlighted its different clothing labels, such as Per Una and Limited Collection, as separate brands. It will launch a new men’s suiting line with Savile Row tailor Richard James, called the Savile Row Inspired collection, for March.
M&S reported that its international sales rose 9 percent during the period. The retailer opened 12 international stores during the half, and now operates 369 stores across 42 countries. It plans to open a further five stores in India during the second half and a further four in Shanghai, while its flagship in Paris and a dedicated French Web site will open before Christmas. M&S has also signed leases for four further full-line stores in Paris.
The company said it remains “cautious” about the outlook for holiday trading, but noted that it is “well set up for the all important Christmas period.” The company added: “We will continue to manage the business for a challenging environment, with particular focus on offering great value to our customers and tight control of costs and stock,” it stated. Marks & Spencer will update its third quarter sales Jan. 10.