Marks and Spencer said this morning that it was starting to see the fruits of a refreshed strategy as the British retailer revealed a 9.6 per cent hike in revenues thanks to selling trendy clothes and a wider range of food.
For the year, M&S said that revenues reached £11.93bn compared to £10.88bn, in the previous year, as the grocery and department store turned its focus to more modern clothing and wares which appealed to a new customer base.
The retailer’s share price is up some 20 per cent over the past year and bosses will be hoping today’s results give it a further boost.
Despite the brand being known for more luxury food items, M&S said that sales in its supermarket also rose 8.7 per cent during the year as shoppers turned to the retailer for “trust” and the wide selection of food it sells.
However, the group said that sales in its joint venture with Ocado were down 1.2 per cent, – with its share of Ocado Retail making a net loss of £29.5m compared with a net profit of £13.9m last year.
“The reduction was driven by the effects of higher fixed costs from new and underutilised capacity, increased marketing to drive new customer growth and energy related cost pressures,” M&S said.
As part of its growth strategy, M&S revealed plans earlier this year to expand its physical store offering investing half a billion in the opening of 180 full-line stores and opening more than 100 new food stores.
The company has outperformed rivals such as John Lewis which has struggled to gain cash during the cost of living crisis and appeal to customers.
“In a difficult trading environment M&S has delivered solid results, with notable progress in clothing and home,” Charlie Huggins, manager of the Quality Shares Portfolio at Wealth Club, said:
“With the new year having got off to a good start and plans to reinstate dividends, the turnaround plan to revitalise the brand and reignite growth appears on track.”
He added: “The clothing and home division has been a problem child for M&S for many years. The new strategy, launched last year, aims to improve brand perception and designs, reduce discounting and improve the online offering, while taking a knife to costs and instilling a more entrepreneurial culture. Early signs are this plan is resonating with consumers with M&S increasing its market share in clothing and footwear during the year.”