Marks & Spencer in the red for first time in 94 years

For the first time in 94 years, the iconic department store chain Marks & Spencer reports a loss: profits in the past six months have been below zero. Yet there are also signs of recovery.

In the half-year to 26 September, Marks & Spencer recorded a loss of 87.6 million pounds compared with a profit of 158.8 million pounds in the same period last year. This is the first time in 94 years that M&S has ended up in the red, mainly due to the collapse of clothing sales. Total sales for the period fell by 15.8% to 4.09 billion pounds.

Sales of clothing and other non-food items have long been a headache for the British department store chain. Still, the corona pandemic and associated lockdowns are now causing a complete crash in those categories. For example, between July and September, sales of clothing in inner-city stores fell by 53%.

Due to the announced closure of some 110 department shops and the dismissal of almost 8,000 employees, there were high one-off costs. Restructuring costs of 92 million pounds have already been incurred in the past half-year, and it is estimated that up to 120 million pounds of restructuring costs will be incurred in the future.

Nevertheless, there is a unique sense of optimism among both management and stock market investors. Today's loss is the ashes from which the administration hopes that a new, slimmed-down and digital-savvy M&S will emerge.