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M&S slides to first loss in 94 years as Covid-19 hits clothing sales
BRITAIN'S Marks & Spencer reported the first loss in its 94 years as a publicly listed company after clothing sales were hammered by the Covid-19 pandemic.
One of the best known names in UK retail said on Wednesday that it made a pretax loss before one-off items of £17.4 million (S$30.7 million) in the 26 weeks to Sept 26 - its first loss since listing its shares on the stock market in 1926.
The outcome was ahead of analysts' average forecast of a £59 million loss and compared with a profit of £176 million in the same period last year.
Clothing and home sales fell 21.3 per cent in the second quarter after a first-quarter decline of 61.5 per cent, damaged by a three-month novel coronavirus lockdown in the spring and the impact of the virus on customer demand.
All clothing retailers have been hit hard by the coronavirus crisis. On Tuesday Primark reported a 63 per cent fall in annual profit and Next last week forecast a 50 per cent decline.
M&S reported first-half food sales up 2.7 per cent on a like-for-like basis, with weak performances from stores in city centres and transport hubs because of the government's work-from-home directive, offset by a better showing from suburban stores.
The business has also benefited from a tie-up with Ocado , giving the M&S food operation an online presence for the first time.
Bloomberg reported that the September launch of the Ocado joint venture has been successful, with M&S banking a nearly £40 million profit from it.
M&S, the shares of which have fallen 57 per cent this year, said that trading in the first four weeks of the second half continued at similar rates to the end of the second quarter, with clothing and homeware revenue down 21.5 per cent, food revenue up 3 per cent and international revenue up 7.4 per cent.
The group cautioned that England's new four-week lockdown, beginning on Thursday, will hit clothing and homeware store sales and profit.
The company has accelerated its restructuring during the pandemic and already revealed plans to cut 7,000 jobs, about a 10th of its workforce. REUTERS, BLOOMBERG