Marks & Spencer (LON:MKS) reported a fall in profits of 62 percent for the year, amid a slump in clothing sales.
M&S reported a post-tax profit of £29.1 million for the 52 weeks to 31 March, compared to £115.7 million the year previously.
UK like-for-like sales fell 1.6 per cent, alongside clothing and home sales falling by 3.4 per cent. Total group sales dropped 2.1 per cent.
M&S have attributed to the fall in profitability due to increased pressure from its online competitors such as Ocado.
Back in September M&S announced plans to launch an online shopping service, in a bid to boost its presence.
In a statement, M&S chief executive Steve Rowe said: “At our half year results in November I outlined the need for accelerated change at M&S. The first phase of our transformation plan, restoring the basics, is now well under way and the actions taken have increased the velocity of change running through our business. These changes come with short term costs which are reflected in today’s results.
“There are a number of structural issues to address and we are taking steps towards fixing these. The new organisation will largely be in place by July and the team is now tackling transforming our culture to make M&S a faster, lower cost, more commercial, more digital business. This is vital as we start to leverage the strength of the M&S brand and values across a family of businesses to deliver sustainable, profitable growth in three to five years.”
The disappointing results follow Monday’s announcement that Marks & Spencer plans to accelerate plans to close 100 stores, in a bid to initiate a turnaround.
As part of a company restructuring agenda spearhead by CEO Steve Rowe, M&S is expected to cut down store space allocated to clothing, which has continued to drag down profits.
Shares in Marks & Spencer are trading up 4.45 percent as of 11.39 percent.