We were pants: Marks and Spencer profits down but boss insists firm is fighting back

Graham Hiscott
6 Nov 2012

The firm unveiled sales of general merchandise – everything apart from food – crashed 4.3% in the six months to the end of September

Struggling Marks and Spencer claimed it was fighting back today – despite suffering another plunge in profits.

Under-fire boss Marc Bolland insisted his three-year plan to boost the business was on track.

But experts warned he was fighting for his job as the firm unveiled sales of general merchandise – everything apart from food – crashed 4.3% in the six months to the end of September.

M&S, the country’s largest clothing retailer, has been slammed by customers and outsiders for its ranges and stores.

Under Mr Bolland, the firm has set about improving collections, revamping stores, introducing new technology and shaking-up its management.

But despite a boost from its food stores, where takings rose 1.1%, group profits still tumbled nearly 10% to £290million in the six months to October.

Mr Bolland admitted it needed to improve, particularly in clothing, saying: “Quality is always important for us but it can get better and we can be more trend-led.”

He insisted it had learnt from a buying blunder earlier this year, when it ran out of women’s jumpers as a winter chill struck.

The chain sold 100,000 of its popular jumpers and cardigans – but Mr Bolland said it could have sold three times more.

To avoid being caught out when it launched a new ad campaign featuring military-style coats, the chain boosted ordered to ensure it had enough stock in its 730 UK stores.
The same autumn marketing blitz featured women grey hair and curves.

Elsewhere, a new lingerie range from movie star Rosie Huntington-Whiteley has proved a hit, selling 100,000 items.

But the overhaul of the business is costing M&S dear, with £825million of investment this year, on the back of £738m in the previous 12 months and £850m in the year ahead.

Retail analyst Nick Bubb warned Mr Bolland, who was paid nearly £1.7million last year, was under pressure.

He said: “Bolland will have to get profits moving up at M&S if he wants to keep his job.”

Fellow analyst Bethany Hocking, at Investec, said: “We continue to have concerns about M&S.”