M&S suffers pre-tax loss of £87.6 million

Marks & Spencer (M&S) has suffered a 15.8% fall in revenue and pre-tax loss of £87.6 million in the 26 weeks ended 26 September 2020, with the retailer heavily impacted by the disruption caused by the Covid-19 pandemic.

This represents a “better than expected” performance, surpassing a predicted 22.8% drop in sales for this period.

One area the retailer was able to perform strongly in was its food business, achieving a 2.7% like-for-like growth over the six months. However, it saw sales plunge by 40.8% in clothing and home, despite online sales in this category rising by 34.4%.

M&S also emphasised its intention to restructure its business to a more digitally-focused model in response to changing customer behaviours. This includes through its partnership with Ocado from 1 September, enabling consumers to shop for M&S-branded products via Ocado.com.

The retailer additionally revealed it is launching a new division within its clothing and home business called MS2, which will seek to combine online, data and digital trading capabilities under a single team.

In August, M&S announced it will be cutting 7,000 jobs across its business over the next three months at both store and management level as part of its Never the Same Again digital transformation plan.

Steve Rowe, CEO at M&S, commented: “In a year when it has become impossible to forecast with any degree of accuracy, our performance has been much more robust than at first seemed possible. This reflects the resilience of our business and the incredible efforts of my M&S colleagues who have been quite simply outstanding.

“But out of adversity comes opportunity and, through our Never the Same Again programme, we have brought forward three years change in one to become a leaner, faster and more digital business. From launching M&S Food online with Ocado to establishing an integrated online business division MS2 to step-change growth, we are taking the right actions to come through the crisis stronger and set up to win in the new world.”