Skip to main content

UK’s Marks and Spencer Reports Worst Performance in 4 Years

After two consecutive years of falling profits, the UK’s Marks & Spencer is under increased pressure to defend its strategy. Clothing and homeware sales have dropped for seven consecutive quarters, and the company posted a 6% drop in profits during the fiscal year ending March 2013–its worst performance in four years.

Marks & Spencer’s food business, however, has not only outperformed major UK supermarkets, but also grew just over 4% this year. Unfortunately, the rise in food sales wasn’t enough to compensate for the drop in apparel and homeware.

Marc Bolland, the retailer’s relatively new CEO (he took the position in May of 2010), has brushed off suggestions that he’s in over his head. He told press that “A big job comes with pressure…and I knew that when I started the job.”

The retailers has promised investors that capital expenditures will be “slashed” from £775 million to £550 million over the next two years, as they conclude expensive infrastructural changes.

Regardless of profit losses, shares in Marks & Spencer reached a five-year high this year, at least partially fueled by rumors of a second-party takeover. Yesterday, shares rose 4.7%.