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Multichannel sales up but M&S profits falter in latest financial year

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Multichannel sales up but M&S profits falter in latest financial year
Multichannel sales up but M&S profits falter in latest financial year
Multichannel growth could not save Marks & Spencer from a 14% fall in profits in its latest financial year. The high street retailer said multichannel sales lifted by 16.6% in its last financial year but that its  pre-tax profits fell to £564.3m from £658.0m last time. Sales over mobile devices grew by almost 200% to account for 18% of multichannel sales.


But while multichannel shopping grew, overall group sales rose by only 1.3% to £10bn in the year to March 30, and total UK sales grew by just 0.9%. Food sales rose by 3.9%, but general merchandise was down by 2.4%. Like-for-like sales, which strip out the effect of store openings and closures, fell by 1%, with food up by 1.7% but general merchandise sales, primarily fashion though also including homewares, were down by 4.1%.

Growth came in M&S’ international operations, where sales rose by 4.5%, and the company renewed its commitment towards becoming a leading international multichannel business. “As we enter the third year of our transformation, we are encouraged by the significant progress we have made,” the M&S full-year statement said.

Chief executive Marc Bolland said the company was working hard to get general merchandise “back on track.” He added: “Our international operations performed well in key markets and our multichannel business delivered strong growth.”

Highlights in the retailer’s multichannel development included the launch of free next-day collection from store, and seven new international websites launched in Europe and China. The company said its multichannel flagship store, Cheshire Oaks, had enjoyed a “strong sales performance” since it opened in August, along with positive customer feedback.

The company now sees 3.6m weekly visitors to its website, and says that online sales account for 13% of its general merchandise sales. Some 44% of online orders are now collected in store through the Shop Your Way service.

Across its estate, some 1,200 store staff now use iPads to assist customers, while Browse and Order points are available in stores. Mobile and tablet sales grew by almost 200% and now account for 18% of multichannel sales following the relaunch of its mobile optimized site, its first transactional iPhone app and a new M&S Home iPad app.

The company has also completed testing of the first phase of its multichannel platform, which is to launch in spring 2014, and is adapting its supply chain and logistics to fit multichannel sales. Its new dedicated ecommerce distribution centre at Castle Donington was launched earlier this month and the rest of a new network will be in place by 2015/2016. As a result the company said it would cut lead times by 70%, improving both availability and enabling later cut off times for deliveries.
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