M&S scores first rise in profits for four years

Marks & Spencer has reported its first rise in profits for four years.

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M&S must get its womenswear right

Marks & Spencer has reported its first rise in profits for four years. Underlying profits rose by 6.1% to £662m in the year to 28 March 2015. In 2009 the figure was over £1bn. In the latest quarter, like-for-like sales of general merchandise clothing, footwear and homeware rose 0.7%, the first uptick in 15 quarters. M&S hiked its dividend and announced a share buyback programme. The shares rose to a seven-year high.

What the commentators said

By contrast, Next spent £700m in the same period, and has just overtaken M&S as Britain's most profitable clothing retailer. As for whether it is paying off, CEO Marc Bolland "knows that he has to show consistent growth in womenswear", not just one quarter's increase, "before he can pronounce job done'".

Revamping the supply chain should help, said Suzanne Plunkett on Reuters. In recent years M&S has been hampered by its inability to replenish popular lines fast, in contrast to Zara owner Inditex and Next. M&S has traditionally relied on third-party suppliers to create, manufacture and ship most of its clothes.

Now it is going the Next/Inditex route, gaining more control in order to replace popular items faster. Bolland wants to raise the proportion of products designed in-house to 60% from 25%. Forget the stores it's the supply chain mechanics that could "hold the key" to its revival.

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