British department store chain Marks & Spencer has not managed to increase its profits, despite a turnover rise in its latest broken fiscal year. It is the third year in a row with lower profits, but the change into a multichannel company is slowly paying off.
"Strong year" for food
Marks & Spencer ended its latest fiscal year (until 29 March) with a 2.7 % turnover increase to 10.3 billion British pounds, some 12.6 billion euro. Its British home territory grew 2.3 %, while international activities surged ahead 6.2 % (at stable exchange rates).
"Our Food business had a very strong year, consistently outperforming the market", CEO Marc Bolland said. The Dutch CEO of England's largest clothing retailer has also seen "early signs of improvement" in general merchandise, i.e. clothing and home accessories.
Earnings before interests, taxes, depreciation and amortization (EBITDA) dropped for the third year in a row, this time a 3.9 % profit drop to 623 million pounds (some 750 million euro). The British icon has outperformed analysts' expectations at 614.5 million pounds.
Web shop shows remarkable growth
Remarkable is that M&S's web shop had a 9 % increase in customers, who in turn bought quite a bit as the web shop's turnover grew 22.8 %. That means the shop now represents 16 % of the group's total turnover, compared to 13 % the year before.
Marks & Spencer moved away from Amazon's platform to work on its own, brand-new web shop which focuses a lot more on content.