33.2 C
London
Wednesday, August 12, 2020

Marks & Spencer’s chief warns over profits in price-cutting turnaround plan

Must read

UK nosedives into largest recession on record

Britain has officially entered into the largest recession on record after figures showed the pandemic sent the economy plunging by 20.4 per cent between...

One feared dead after train derails in Scotland

At least one person is feared to have died and serious injuries have been reported after a train derailed in Aberdeenshire, Scotland amid heavy...

New Zealand scrambles to find source of new virus infections

Health authorities in New Zealand were scrambling on Wednesday to trace the source of a new outbreak of the coronavirus as the nation’s largest...

Barack Obama says Biden has ‘nailed’ his VP pick with Harris

Former president Barack Obama has hailed his former vice president’s running mate selection of Kamala Harris, saying “Joe Biden nailed this decision”. “By choosing Senator...

Marks & Spencer’s new boss Steve Rowe has pledged to slash prices and put more staff in stores to turn around its beleaguered clothing arm, but warned profits will take a hit.

Mr Rowe, who took on the top job from Marc Bolland in April, unveiled his overhaul plans as the group posted a 4.3% rise in underlying pre-tax profits to £689.6m (€903.27) for the 53 weeks to April 2.

But the group said the investment in its revamp as well as tough conditions on the high street would “have an adverse effect on profit in the short term”.

M&S also dealt a blow to 11,000 staff as it announced plans to close its final salary pension scheme for future service accrual to existing members, having already closed it to new members since 2002.

But the group, which employs 70,000 store staff, said it would increase pay across the board following the introduction of the UK National Living Wage, to £8.50 (€11.14) an hour for all store staff outside London and to £9.65 (€12.64) in London, with pay rises also due to co-ordinators and managers from next April.

Mr Rowe said his clothing overhaul will see the group reduce everyday prices and cut back on promotions and clearance sales.

But it will remain focused on quality through “fabric, fit and finish”.

The group also plans to “re-establish our style authority”, with a focus on stylish wardrobe essentials to win back customers, and will reduce the number of product lines in its autumn/winter ranges.

As part of aims to improve its customer service, more staff will be put in store, in particular cafes and changing rooms.

The group admitted the turnaround of its clothing business “won’t happen overnight”, following a hefty 2.7% slide in sales over the final quarter of its financial year.

Mr Rowe said: “Our results last year were mixed. We continued to outperform on food but we underperformed on clothing and home sales.

“This is not satisfactory and today we are outlining our initial plans to address the issues and to position Marks & Spencer to deliver profitable sales growth.”

- Advertisement -

More articles

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisement -

Latest article

UK nosedives into largest recession on record

Britain has officially entered into the largest recession on record after figures showed the pandemic sent the economy plunging by 20.4 per cent between...

One feared dead after train derails in Scotland

At least one person is feared to have died and serious injuries have been reported after a train derailed in Aberdeenshire, Scotland amid heavy...

New Zealand scrambles to find source of new virus infections

Health authorities in New Zealand were scrambling on Wednesday to trace the source of a new outbreak of the coronavirus as the nation’s largest...

Barack Obama says Biden has ‘nailed’ his VP pick with Harris

Former president Barack Obama has hailed his former vice president’s running mate selection of Kamala Harris, saying “Joe Biden nailed this decision”. “By choosing Senator...

Ghislaine Maxwell calls on judge to improve prison conditions

British socialite Ghislaine Maxwell says Jeffrey Epstein’s suicide last year is to blame for the conditions she faces in jail while awaiting trial. Through her...
%d bloggers like this: