LONDON: British retailer Marks & Spencer said on Wednesday its new boss's plan to turn around the firm's underperforming clothing and homewares business would impact short-term profit.
Chief Executive Steve Rowe said his focus will be on improvements to the quality, fit and availability of M&S's ranges. He would also lower prices, reduce the proportion of sales on promotion and increase store staffing levels.
"These actions, combined with the difficult trading conditions, will have an adverse effect on profit in the short term," he said.
"We are, however, confident that our commitment to delivering the right product, price and service will help return clothing & home sales to growth."
M&S, whose shares have fallen a quarter over the last year, reported an underlying pretax profit of 689.6 million pounds ($1.01 billion) for the year to March 26.
That was ahead of analysts' average forecast of 673 million pounds and 661.2 million pounds made in 2014-15.
Prior to Wednesday's update analysts' consensus for 2016-17 and 2017-18 was 710 and 744 million pounds respectively.
Rowe, a company veteran of 26 years, replaced Marc Bolland as the boss of the 132-year-old firm last month, moving up from the role he took only last July as head of the troubled clothing and home division, which has seen five years of almost constant falls in sales.
Fixing that division, which contributes about 60 percent of M&S's profit, is his priority.
He said additional strategic questions, including international, the UK store estate and organisation will be addressed in the autumn.
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