Success: M&S reap rewards of new strategy

LAURA MCGUIRE

MARKS & SPENCER (M&S) yesterday said it was starting to see the fruits of a refreshed strategy as the British retailer revealed a 9.6 per cent hike in revenues thanks to selling trendy clothes and a wider range of food.

M&S said revenues for the year reached £11.93bn compared to £10.88bn in the previous year, as the grocery and department store turned its focus to more modern clothing and wares targetting a new customer base.

The retailer’s share price is up some 20 per cent over the past year and the share price shot up a further 11 per cent yesterday on the back of the numbers.

Despite the brand being known for more luxury food items, M&S said that sales in its supermarket also rose 8.7 per cent during the year as shoppers turned to the retailer for “trust” and the wide selection of food it sells.

However, the group said sales in its joint venture with Ocado were down 1.2 per cent, – with its share of Ocado Retail making a net loss of £29.5m compared with a net profit of £13.9m last year.

“The reduction was driven by the effects of higher fixed costs from new and underutilised capacity, increased mar- keting to drive new customer growth and energy-related cost pressures,” M&S said.

As part of its growth strategy, M&S revealed plans earlier this year to expand its physical store offering –investing half a billion in the opening of 180 fullline stores and opening more than 100 new food stores.

The company has outperformed rivals such as John Lewis.

“In a difficult trading environment M&S has delivered solid results, with notable progress in clothing and home,” said Charlie Huggins of the Wealth Club. “With the new year having got off to a good start and plans to reinstate dividends, the turnaround plan to revitalise the brand and reignite growth appears on track.”

“The clothing and home division has been a problem child for M&S for many years. The new strategy, launched last year, aims to improve brand perception and designs, reduce discounting and improve the online offering, while taking a knife to costs and instilling a more entrepreneurial culture,” Huggins said.

“Early signs are this plan is resonating with consumers with M&S increasing its market share in clothing and footwear during the year,” he added.

The Excel sees up to 4m visitors every year, with 1m of these hailing from overseas. It accounts for 25 per cent of all inbound business tourism to London, according to Rees. Over the year since its opening, 150m journeys have been made and it accounts for one in six of all journeys made on Britain’s transport network.

The 15-year Crossrail project, which officially finished this week, now sees 24 trains run per hour at peak times and connects passengers all the way from Shenfield to Heathrow.

In Brief Sse Profit Soars As It Ramps Up Green Spend

FTSE 100 energy giant SSE yesterday reported an 89 per cent jump in its adjusted pretax profit after benefitting from higher energy prices. The firm’s annual profit rose from £1.16bn in 2022 to £2.18bn for the year ending in March. It also said it would accelerate its five-year net zero plan to 2027, increasing its investment in green projects by 40 per cent to £18bn. Chief executive Alistair Phillips-Davies said the spending bump “raises the bar” on its green ambitions “and provides a solid platform for growth that could see us invest up to £40bn over the next decade”. However, the firm cut its dividend for 2023/24 by 38 per cent to 60p per share to help fund the investment. The firm’s share price closed up 1.61 per cent to 1,900p.

Severn Trent Profits And Forecast Lifted

Has M&S’ much-talked-about turnaround now simply become a success story? There have certainly been plenty of attempts, from ditching the famed St Michael brand in favour of Autograph and somewhat unwisely using celebrities to flog its lingerie. Who knew the turnaround strategy that would work would be doubling down on what it’s known for, with a slightly modern twist?

Analysts were certainly chirpy, with Peel Hunt’s analysts titling their note to the City this morning “Get set, GO!” Shares responded accordingly too. Much of the credit will rightly go to new CEO Stuart Machin, but not forgotten should be the work of former boss Steve Rowe who set the business