London: Britain's Marks & Spencer said it would accelerate its turnaround plan as it reported on Wednesday a 5 percent fall in first-half profit, a second straight decline, hurt by sales falls and cost pressures.
M&S, one of the best known names in British retail, said it would speed up changes for clothing and homeware in its stores, including closures, cutting space and relocations. It also plans to open fewer Simply Food stores than previously planned.
Chief Financial Officer Helen Weir had decided to leave as soon as a successor was found. Weir, a former finance director at retailers John Lewis and Kingfisher, joined the company in April 2015.
M&S also said it would further modernise its clothing supply chain to make it faster and lower cost, set a target for a third of its clothing and homeware sales to be made online and plans to substantially reduce its cost base.
Shares in M&S, down 6 percent so far this year, opened up 4 percent on Wednesday before going into reverse to trade down 2 percent by 0835 GMT.
HIGH STRET, HARD TIMES
Chief Executive Steve Rowe is one year into a five-year turnaround he has said will dent short-term profits.
The 133-year-old M&S is battling to revive its fortunes after falling out of fashion over the last decade. Its task is being made harder by a squeeze on consumers' spending power as inflation rises and wage growth falters. Last week UK interest rates also went up for the first time in a decade.
"In clothing & home, early results are encouraging and in international we now have a profitable and robust business. We recognise now that we face stronger headwinds in food which will be addressed in the year ahead," said Rowe.
"The business still has many structural issues to tackle as we embark on the next five years of our transformation, in the context of a very challenging retail and consumer environment."
Rowe's initial strategy was focused on reduced prices for basic clothing ranges, cutting back on clearance sales and promotions while improving fit, availability and customer service.
His plan also involved switching some UK shop floor space from clothing to food. M&S said last year it would close about 30 UK stores selling clothing, homeware and food and downsize or convert another 45 into food stores over five years.
In September retail veteran Archie Norman became M&S chairman, while last month Jill McDonald, the former boss of Halfords, started as the boss of clothing, home and beauty.
M&S made a pretax profit before one-off items of 219.1 million pounds ($288.18 million) in the 26 weeks to Sept. 30 - ahead of analysts' average forecast of 201 million pounds but below 231.3 million pounds made in the same period last year.
Second-quarter clothing and homeware like-for-like sales fell 0.1 percent, having fallen 1.2 percent in the first quarter. Same store food sales fell 0.1 percent, the same as the previous quarter. Both outcomes were ahead of analysts' expectations. ($1 = 0.7603 pounds)