M&S recorded the first loss after 94 years of its launch in the stock market, due to the Corona pandemic that ravaged the clothing markets.
In six months, the company lost 87.6 million pounds compared to last year’s profits during the same period, which was estimated at 158.8 million pounds, yet the CEO said that the company’s performance is significantly better than it looked before.
The company announced in August that M&S had developed a plan to cut 7,000 jobs in the company within three months, and the company’s total sales during the six-month period had fallen by 15.8% to 4.09 billion pounds, affected by the decline in demand for clothing and home furnishings, as in the period between In July and September, sales of its downtown stores decreased by 53%.
Clothing sales in particular decreased due to the general closure, and people went to wear normal clothes, but the company expects that the demand for formal dress and dress for special occasions will return again.
When the company’s 600 stores were closed in the general closing period, the company started operating online, where online sales in general were higher than ever before, but that did not make up for the loss that had befallen the company this year. The company said some changes would have to be made to survive, but it wasn’t doing it back then, but now it’s changing the way it operates even at the most basic level.
Contracting with Ocado:
The M&S Group announced strong growth in its joint venture to sell food and household goods with Ocado, which has been delivering food to M&S since the beginning of September, and said that the partnership caused a 47.9% jump in sales and an improvement in profits.
The group created more than 750 new product lines in the home goods space to expand its footprint on the Ocado platform, and M&S was one of the few large food retailers that did not have an on-demand delivery service online, and its contract with Ocado marked the beginning of its path to becoming an online business.
Julie Palmer, partner at Begbies Traynor, said “the company’s food business is booming because of the lockdown in Britain, as consumers will need to get quality meals delivered to them instead of leaving their homes“. The company indicated that the grocery market is growing strongly during the current half-year period with an increase in sales by 2.7% on the back of the outstanding growth achieved by its Simply Food stores.
Signs of improvement:
Critics have always said about M&S that it constantly suffers from the problem of delay in changing its way of working in line with changing customer requirements, but its management today hopes that its current results will convince investors that it is no longer experiencing any difficulties, as the pandemic caused changes in the company within a year. One is equivalent to the changes the company would have made in 3 years, so the company says the pandemic has come at an appropriate time in its plan to reinvest the company’s capabilities.
The results for the current half-year period include expenses of 92 million pounds due to the loss of 7,000 jobs, and it added that it will cost additional expenses of up to 120 million pounds due to store closures over the next seven years.
CEO Steve Rowe said, “Our goals will remain the same and we will continue with the changes in the company in the long term to build a more digitally present brand in a world that will not go back to the way it was before forever, and we know that the challenges we face continue.” He also added that “the company In much better condition than before.“.