HIGH STREET STAPLE Marks and Spencer (M & S) have increased their year-on-year profits for the first time in four years.
The retail giant has announced its full year results for 2015 which see underlying profits increase by 6.1% to £661.2 million (€922.2 million)
The company scored a massive PR coup in February when a high-end suede skirt from its collection was spotted on celebrities including socialite Olivia Palermo and British tv presenter and style icon Alexa Chung.
The skirt, retailing for roughly €275, doesn’t come cheap, and was initially sold only in a limited number of the company’s stores, underlying its exclusivity.
While it may not be solely responsible for the turnaround in the company’s fortunes (general merchandise sales performance remains “challenging” and “below expectations” according to the results), it has given the brand a timely boost.
In Ireland, where M & S operates 21 stores, a restructure of the business has seen “an improvement in profitability” according to the results statement.
International revenue however (which is where Ireland’s results are recorded together with those of Western Europe and Asia) is down roughly €92 million (5%) for 2015, emphasising that the company still has some way to go to shore up its overseas performance.
Dutch chief executive Marc Bolland said that the results represents “good progress” for the chain.
“We are transforming M&S into a stronger, more agile business – putting the right infrastructure, capabilities and talent in place to drive our strategic priorities,” Bolland said.
Independent industry analyst Louise Cooper said that while the M & S clothing brand is definitely becoming more fashionable it is still significantly more expensive than other retailers like Next.
“Its clothes are still too expensive compared to Next which is now the UK’s No 1 women’s clothing retailer,” says Cooper in a blogpost.
It has been clear for some years that Marks is becoming more stylish and fashionable.
However if they want to regain their position as the mid market clothes retailer of choice, they need to sacrifice some of that margin on pricing.
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