Marks & Spencer slides to first loss in 94 years as COVID-19 hammers clothing sales

LONDON (CNA) – Britain’s Marks & Spencer reported the first loss in its 94 years as a publicly listed company after clothing sales were hammered by the COVID-19 pandemic.

One of the best known names in the United Kingdom (UK) retail said yesterday that it made a pretax loss before one-off items of GBP17.4 million (USD22.6 million) in the 26 weeks to September 26 – its first loss since listing its shares on the stock market in 1926.

The outcome was ahead of analysts’ average forecast of a GBP59 million loss and compared with a profit of GBP176 million in the same period last year.

Clothing and home sales fell 21.3 per cent in the second quarter after a first-quarter decline of 61.5 per cent, damaged by a three-month coronavirus lockdown in the spring and the impact of the virus on customer demand.

All clothing retailers have been hit hard by the coronavirus crisis. On Tuesday Primark reported a 63 per cent fall in annual profit and Next last week forecast a 50 per cent decline.

M&S reported first-half food sales up 2.7 per cent on a like-for-like basis, with weak performances from stores in city centres and transport hubs because of the government’s work-from-home directive, offset by a better showing from suburban stores. The business has also benefitted from a tie-up with Ocado, giving the M&S food operation an online presence for the first time.

M&S, the shares of which have fallen 57 per cent this year, said that trading in the first four weeks of the second half continued at similar rates to the end of the second quarter, with clothing and homeware revenue down 21.5 per cent, food revenue up three per cent and international revenue up 7.4 per cent. The group cautioned that England’s new four-week lockdown, beginning today, will hit clothing and homeware store sales and profit.