Marks and Spencer (M&S) has revealed a £1bn plan of motion to assist it battle coronavirus disaster challenges following a stoop in annual earnings.
The retailer, which has struggled to revive its fortunes over a few years leading to relegation from the FTSE 100 final yr, stated it had embraced a brand new approach of working as COVID-19 struck in a world that may “by no means be the identical once more”.
It outlined a string of actions to handle money and save prices as its troubled clothes and residential division drove a 21% fall in annual buying and selling earnings for the yr to 28 March to £403.1m.
M&S revealed one-off prices of £335.9m with £212.8m of that sum blamed on prices and inventory write downs associated to pandemic disruption.
It left revenue earlier than tax at £67.2m.
The corporate stated its £1bn of actions included £500m of deliberate value reductions and an acceleration within the “re-shaping” of its shops nevertheless it didn’t reveal whether or not that would come with shutting extra websites.
The 2019/20 monetary yr noticed M&S start closing dozens of under-performing shops and put money into digital methods to refocus its buyer providing whereas, latterly, it tailored to new methods of working because the lockdown started in March.
Chief govt Steve Rowe advised traders the disaster had accelerated the tempo of change in how individuals shopped – and M&S should modify too because it prepares to start its essential on-line grocery supply partnership with Ocado in late summer season.
He stated: “Final yr’s outcomes replicate a yr of considerable progress and alter together with the transformative funding in Ocado Retail, out-performance in meals and a few inexperienced shoots in clothes within the second half.
“Nevertheless, they now look like historical historical past because the trauma of the Covid disaster has galvanised our colleagues to safe the way forward for the enterprise.
“While some buyer habits will return to regular, others have modified ceaselessly, the pattern in direction of digital has been accelerated, and modifications to the form of the excessive road introduced ahead.
“Most significantly working habits have been reworked and we now have found we are able to work in a sooner, leaner, simpler approach.
“I’m decided to behave now to seize this and ship a renewed, extra agile enterprise in a world that can by no means be the identical once more.”
M&S shares – down 60% within the yr thus far leaving its market worth at £1.7bn – had been 5% up in early offers on the FTSE 250 index.
However Julie Palmer, associate at restructuring specialists Begbies Traynor, was unimpressed by the replace.
She wrote: “M&S’ fall from grace continues because the coronavirus causes chaos for an already fragile high-street.
“The pandemic will do nothing to ease the retailer’s woes which has suffered from poor buying and selling for the previous few years with the agency’s share value plummeting.
“The retailer has failed to regulate precisely to the altering face of the retail panorama, with main established retailers not holding the monopoly over the market that they as soon as did.”