MARKS AND SPENCER said growth this financial year would be held back by major investment in its online business as the high street bellwether posted its lowest profits for four years.
M&S is spending about £2.3bn over three years on modernising stores and improving IT systems, as part of its plan to become a leading international multi-channel retailer.
It opened an e-commerce distribution centre in Castle Donington last month, and next year will shift from an Amazon platform onto its own.
“Probably for the first time, Marble Arch is no longer our flagship store. The flagship store is dotcom,” chief executive Marc Bolland said yesterday.
The retailer reported a six per cent drop in pre-tax profits to £665.2m in the year to 30 March, well below analyst forecasts of £710m, due to a sharp decline in clothing sales.
General merchandise sales fell 4.1 per cent while food grew 1.7 per cent,
Bolland said it was “working hard” on its clothing strategy and that its new autumn/winter ranges unveiled last week were “a step in the right direction”.
Despite lower profits, shares ended more than six per cent higher as investors bet on strength in food sales and potential recovery in clothing .