Grocery and online sales drive growth as they forecast £ 500million profit and plan for 20 more stores

M&S has announced its intention to open 20 more stores – which could, conversely, continue its elimination of high street stores.

The department store has closed stores in Ashford, Maidstone, Folkestone and Deal in recent years as it consolidates with larger stores in out of town developments.

Westwood Cross M&S store in Thanet

This series of closures was part of a strategy to rationalize its offer after a constant decline in clothing sales and a drop in traffic in the city center.

But in its latest financial figures, for the six months ending October 2, released this morning, the company appears to have reached a milestone, with its food halls and online sales the main growth drivers.

It posted a pre-tax profit of £ 187.3million, in stark contrast to last year’s loss of £ 87.6million.

More encouragingly, it was up from the £ 158.8million profit made in a similar period before the pandemic.

He estimated the annual profits would be “in the order of” £ 500million. The news sent its share price up 15%.

Steve Rowe, CEO of M&S, applauds the company's turnaround
Steve Rowe, CEO of M&S, applauds the company’s turnaround

Food sales this year also increased 10.4%.

Steve Rowe, Managing Director of M&S, said: “Given the history of M&S, we have been clear that we will not be claiming our progress. Unwrapping the numbers is not a linear exercise and we have called the tailwinds of the Covid rebound, as well as the headwinds of the pandemic, supply chain and Brexit, some of which will continue into next year.

“But, thanks to the hard work of our colleagues, it is clear that the underlying performance is improving, with our core businesses making significant gains in terms of market share and customer perception. our performance.

He added that the “pipeline” of new “full-line” stores, which will stock food and fashion, has grown to 20 – six of which have included the purchase of old Debenhams locations.

However, some stores could still close, with M&S bosses saying new branches “will allow consolidation of nearby stores.”

Week Street M&S ​​store Maidstone closed after opening out of town
Week Street M&S ​​store Maidstone closed after opening out of town

Paul Cannons, from the office of investment management firm Brewin Dolphin in Tunbridge Wells, said: Retail park partnerships and stores that remain the unlikely mainstay of the market since the pandemic.

“For its clothing and home activities, M&S is starting to turn the page with the arrival of new brands and a renewed focus on its online store offering a better base. Credit goes to the management team for reversing something that was to become non-investable to be a potentially attractive recovery story.

However, there is always a question mark over next steps as the company moves past its so-called ‘ground-setting’ phase. their place FTSE100 on time, but external factors with the supply chain and rising labor costs might be enough to flatten those goals. ”

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David A. Albanese

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