TThe next two months should be the lucrative time of the year for Main Street, but a terrible update from Marks and Spencer This week will provide a test of the grim reality as the pandemic creates dire trading conditions for the Golden Quarter.
Analysts expect M&S to have incurred a loss of nearly £ 60m in the first six months of its fiscal year due to massive sales that damaged the apparel arm during its three-month spring shutdown. At this time last year, the UK’s largest clothing retailer recorded a profit of £ 176m.
It’s no surprise for close followers of Marks & Spencer to be disappointed when it comes to the struggling apparel business. Thanks to the health crisis, however, the declines were of a different size, as the company is expected to post a steep 40% drop in clothing and home sales in the six months through September 26 when investors are informed on Wednesday.
Sales in luxury dining halls in M&S are expected to be steady, with Covid lowering in stores in city centers and transportation hubs – as commerce is hit by the shift to work from home – matched by active sales at suburban locations. M&S has also strengthened its food business through its recent relationship with Ocado Online GroceryWhich means he will be able to capitalize on the hustle and bustle for his online grocery delivery this Christmas.
But M&S was playing catch-up before the coronavirus hit. Lost It Put in FTSE 100 Index In 2019, the city has been calling for a more dramatic reinvention of the 136-year-old chain, which they complain is burdened by deteriorating infrastructure and many old stores. They’re now getting what they want from the CEO and chairman, Steve Rowe and Archie Norman, Who recently announced that they were chopping 7,000 jobs.
Clive Black, an analyst at Shore Capital, a home broker for M&S, said the pandemic has forced the company to make difficult decisions and address shortcomings such as its inconvenient website: “I think necessity is the mother of the invention here and M&S should make decisions at a much faster pace than You want “.
But he added that the constantly tight restrictions made it difficult to predict the potential level of profitability at M&S in the rest of the fiscal year. Business leaders had hoped that the coronavirus situation would now stabilize but instead are dealing with a high level of uncertainty as “every day another county in England enters to Level 3”.
The financial toll that the epidemic has wrought on the main streets is evident in the impact it has had on the finances of even the strongest retail brands. On Tuesday, arch rival M & S Primark It is expected to report annual profits of around £ 350m, which will be less than half of last year’s total of £ 913m. The online budget clothing chain – such as M&S – doesn’t so much want its customers to feel safe going out into the streets and malls on Christmas.
Richard Hayman, an independent retail analyst, said public concern about the increasing restrictions on the coronavirus has already had an impact on clothing sales, so all bets for Christmas have been off. “This is not a normal condition. This is a totally exceptional period and it is all about moving through it. Before Covid, Primark He was one of our best retailers – and still is. “