25th May 11
Marks & Spencer reveals annual profits rise
by Adam Richards
Star attraction: M&S profits up
Star attraction: M&S profits up
Marks & Spencer revealed an increase in annual profits after gaining market share despite facing challenging conditions on the high street.
The chain, which has 600 shops in the UK as well as 300 overseas, posted an increase of 12.9 per cent in underlying pre-tax profits of £714m during the year ending 2 April. M&S, which sees roughly 21 million customers visit their stores every week, said that industry figures revealed that it increased its clothing market share during the year by 0.5 per cent to 11.7 per cent and boosted its food market share by 0.1 per cent to 3.9 per cent.
Aided by an advertising campaign that featured footballer Jamie Redknapp and X-Factor judge Danni Minogue, the company has managed a resilient performance during the year even though trading conditions were tough and have squeezed other high street retailers.
Yesterday’s results were the first which have been delivered by Marc Bolland, who took the chief executive role last year after departing supermarket Morrisons. The Dutchman revealed a strategic review for M&S in November, which involved speeding up the rate of expansion overseas, making cost savings throughout its supply chain and revamping its various labels in order to create proper brands.
Mr Bolland said while delivering the results that the company traded well amid a challenging environment, increasing their market share in both food and clothing. He went on to say that this was managed because they offered customers great value and quality, as well as more choice through innovation.
M&S revealed that it got off to a good start in the current financial year but issued a warning that rising pressure on consumers’ spending power and increasing costs of raw materials will present new challenges in the coming months.
The company said that it managed to drive market share growth because it offered customers extra choice which appealed to a desire to trade up. It said that sales of its “better” and “best” ranges like its Autograph brand and cashmere knitwear were strong. The group went on to state that sales were also being driven by a range of innovative products, such as the Nearly Naked lingerie range and its Stormwear water-resistant suits.
In food, M&S continues to benefit from the successful “Dine in for £10” offer – and sold 15 million meals over the year. Its online outlet – M&S Direct –saw a rise in sales of 31 per cent, bettering the average online market growth of 20 per cent. The website current; receives over three million visits each week.The group revealed that it was engaging with customers by using social media, with over 295,000 fans on Facebook and 26,000 followers on Twitter.
Mr Bolland also announced that a revamp of the layout of its stores would take place after customers said that they found shops “difficult to shop”. A number of pilot outlets are set to be trialed in October, showing a new space template, with new signage, labelling and packaging to improve navigation for its customers.
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