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Marks & Sparks no longer number one as profits fall again

Published: 08:51 20 May 2014 BST

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Marks & Spencer (LON:MKS) has posted lower profits for the third year running with its labouring clothing business again the culprit.

Underlying profits dropped by 3.9% to £623mln despite strong showings from M&S’s food arm and its online operation.

The profit dip also means M&S has officially lost its number one retail spot to Next. Revenues overall rose by 2.7% to £10.3bn but UK like-for like sales were just 0.2% higher as 1.7% growth in food was offset by 1.4% decline in general merchandise.

Marc Bolland, M&S’s chief executive, said that the group was focused on improving General Merchandise’s performance and was pleased to see early signs of improvement, though he also cautioned that teething issues with the new M&S.com site will affect this quarter.

The improving trend in clothing sales we saw in the fourth quarter has continued in its stores, he said, while food continues to outperform the market.

Bolland said operational improvements will generate a significant improvement in General Merchandise profitability over the next three years through a combination of a new approach to sourcing and trading capabilities.

The dividend for the year was unchanged at 17p.

Shares fell 11p to 440p.


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