United Kingdom retailer Marks & Spencer (M&S) has reported a profit before tax of £66.8m for the year ended 31 March, down 62.1% on last year. Actions taken under the plan include the sale and franchise of the firm's retail business in Hong Kong and Macau.
Shares in M&S have fallen 26% over the past year and the firm is in danger of being booted out of the FTSE 100 index. "These changes come with short term costs which are reflected in todays results".
Worldwide sales fell 7.9 percent to 1,087.2 million pounds during the year while global profit before adjusting items more than doubled to 135.2 million pounds.
M&S - which has 1,035 stores nationwide - said it will be cutting 25 per cent of its floor space devoted to clothing and homeware. This is said to be a result of M&S's successful exit of loss-making owned markets and favourable currency effects.
Comparable food sales were down 0.3 per cent. Revenue nudged up 0.7 per cent to £10.7 billion. M&S attributed this decline to the planned removal of two clearance sales and unseasonal trading conditions during the second half of the year. Various other issues need to be urgently addressed, including the supply chains in both Clothing & Home and in Food requiring significant upgrades, its online capability being behind the best of its competitors and its sluggish website.
Despite the hit, shares in the retailer rose as much as 6pc in early trade, as investors were cheered that pre-tax profits with store closure costs stripped out had beaten expectations.
The British retailer has extended its closure plans as it is focusing on a minimum of a third of its sales online, as per the statement made by the high-street chain.
"The new organisation will largely be in place by July and the team is now tackling transforming our culture to make M&S a faster, lower cost, more commercial, more digital business".
Rowe said it was targeting sustainable, profitable growth in three to five years time.