M&S posts slump in annual net profit

LONDON: Marks and Spencer posted a 71-percent slump in annual net profits on Wednesday, hit by vast restructuring costs and sliding clothing sales, the British retail giant said Wednesday.

Net profits dived to £117.1 million ($152 million, 135 million euros) in the group's financial year to April 1, M&S said in a statement. That compared with profit after taxation of £406.9 million a year earlier.

Underlying pre-tax profits sank 10.3 percent to £613.8 million.

Total sales grew two percent to £10.622 billion, but faltered in its clothing and home furnishings division.

The performance was blighted by a vast £437-million accounting charge for restructuring costs, related to store closures and changes in pay and pensions.

Chief executive Steve Rowe was appointed in April 2016 and has since embarked upon a turnaround plan to try and transform the company's fortunes.

However, M&S added Wednesday that earnings also fell "due to the expected decrease in clothing and home sales and increased costs of new space".

Clothing sales dropped 5.9 percent in the first three months of this year, with falls compounded by the timing of Easter. That marked an abrupt end to the revival seen in the third quarter, when sales rose by 2.3 percent.

"Last year we outlined a comprehensive plan to build strong foundations for the future," said Rowe.

"We said we would recover and grow clothing and home, continue with our plans for food growth, remove costs and simplify the business.

"We achieved a huge amount in the year and whilst there is still much to do, I am pleased with our progress and we remain on track."