M&S Annual Profits Drop For Third Year In A Row
Marks and Spencer has announced that staff and management will be denied bonuses this year, after recording its third straight year of declining profit.
The decision comes as the high street icon revealed a 3.9% drop in full-year underlying pre-tax profit to £623m.
The company said its like-for-like UK sales for general merchandise, which includes clothes and furnishings, were down 1.4% in the year until March 29.
In the same period its like-for-like food sales outperformed the wider market and were up 1.7%.
M&S has invested heavily during the last three years to try and revive its general merchandise business.
For the first time the profit outcome is below the annual profit made by faster growing fashion rival Next.
Total UK sales were up 2.3% in the year but general merchandise remained at 0%.
Multi-channel sales, including online and mobile, were up 22.8%.
It said the company's newly launched website would take up to six months "to settle in" and therefore revenue for the current quarter is expected to be adversely affected.
Chief executive Marc Bolland said: "We are focused on improving our performance in general merchandise and were pleased to see early signs of improvement.
"Our food business had a very strong year, consistently outperforming the market."
Last week Mr Bolland, who has now been in the job four years, announced a new campaign to push 19 million customers online.
He added: "Three years ago, we recognised the scale of investment required to transform our business, investing to strengthen our foundations and improve our customer offer.
"We are making solid progress on this journey and are now focused on delivery."
Sales at M&S were down for the eleventh quarter in a row last quarter, although clothing purchases did rise slightly.
The company was able to reduce its net debut by 6% in the year, to £2.46bn.
It said 2013/14 was a "significant year on our journey" as it seeks to transform itself from a traditional UK chain to "an international, multi-channel retailer".