1% fall in profits for M&S22/05/2012 - 07:06:49
Retail giant Marks & Spencer today reported a 1% fall in annual profits to £705.9m for the year to March 31, the first drop in three years.
Marc Bolland is set to come under increased pressure from investors after the results.
Despite efforts to pull in customers with celebrity-laden advertising campaigns, featuring the likes of actresses Joanna Lumley and Rosie Huntington-Whiteley and actor Ryan Reynolds, sales of general merchandise have fallen in the last year.
Mr Bolland, who is reportedly set to pocket a combined pay package of around £6m this year, has been told by analysts that sales targets he set in November 2010 may be too ambitious.
The squeeze on household incomes in the UK, where M&S has 700 stores, is likely to take some of the blame for the weaker performance, but a failure to keep up with its rivals in clothing, such as Next and Primark, is also at the root of its problems.
Nick Bubb, independent retail analyst, said: “In all, he has not delivered the sales he needs with his three-year target. The focus is on whether he will admit that the year has started badly.”
Mr Bolland is expected to step back from his goal to boost sales to between £11.2bn and £12.2bn by 2014 as the economic headwinds show no sign of abating.
The group has said its prospects look brighter as the Diamond Jubilee, Euro 2012 football championships and Olympics will play into its hands by giving cause for celebration over the summer.
It has also seen encouraging demand for new lines from model Twiggy and those seen in a new advert featuring singer and model Myleene Klass and former X-factor judge Dannii Minogue in which Gary Barlow sings the Beatles classic 'Here Comes The Sun'.
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