Marks & Spencer Group MKS – Results for the year to the end of March read like an obituary for what was once a great British retail institution. It matters not where you look, Clothing & Home, Food, International, Marks is in retreat on all fronts, exiting international markets, reducing selling space, and expecting further closures during the current financial year. Even the successes ring hollow, when you examine them. International profits more than doubled but only because they got rid of the loss making bits. They are even reduced to blaming unseasonable weather for impacting trading in the second half. And of course you can not forget that old chestnut, the challenging UK consumer market. Any management which has to blame the consumers, has got serious problems, when it should be blaming itself for failing to live up to the challenges.
Group revenue fell by 0.7% leading to a slump of 62.1% in profit before tax and 77.8% in basic earnings per share. Of course these can be adjusted to make them look better and Marks does not hesitate in so doing. Like for like sales fell in each quarter One can almost hear the sigh of relief as it announces that it will manage to maintain its dividend. Blame is laid on the costs incurred as Marks pursues its transformation plan, “restoring the basics”, which still has a long way to go. It even lists its problems so that shareholders can see what damage management has done and the problems which it has to overcome if it is to survive.
Marks admits it has lost appeal and has to recover it, it needs to refresh its food offer, stop losing market share in younger customers and larger households, its online offer is not competitive and its website is too slow. If a website is slow, that does not happen overnight, it is an indication of a sclerotic management living in the past. This seems to be the year when the past has well and truly caught up with Marks. Will predators soon be circling it ?