Britain's Marks & Spencer swung to a first-half pre-tax loss of £87.6 million ($113.43), its first, as Covid-19 hit clothing and homeware sales.
The retail chain’s loss for the six months ended September 26 was its first since 1926, when it became a publicly listed company, and contrasts sharply with the £158.8m pre-tax profit seen in the same period last year. Revenue fell almost 16 per cent to £4.09bn, with an adjusted loss of £17.4m.
In a year when it has become impossible to forecast with any degree of accuracy, our performance has been much more robust than at first seemed possible.
However, chief executive Steve Rowe was upbeat: “In a year when it has become impossible to forecast with any degree of accuracy, our performance has been much more robust than at first seemed possible.
“But out of adversity comes opportunity and, through our Never the Same Again programme, we have brought forward three years change in one to become a leaner, faster and more digital business.”
Retailers were hit hard at the start of the pandemic when the country went into lockdown and non-essential stores were closed. While UK retail sales rebounded for the fifth consecutive month in September, a second lockdown will hurt the sector once again when stores shut up shop on Thursday.
In August, M&S said it would cut 7,000 jobs over three months and the company is also closing 100 stores as it tackles the high-street downturn.
Sales for the group slid 15.8 per cent to £4.09bn, outperforming the company’s Covid-19 expectations of a 22.8-per-cent decline.
“As a result, the group exited the period with reduced stock levels year-on-year and generated free cash flow,” the company said in a statement.
The company’s food business performed strongly, achieving 2.7 per cent growth as its new partnership with British online supermarket Ocado helped to offset some of the effects of store closures.
However, clothing and home sales declined 40.8 per cent, with a fall of 21.3 per cent in the second quarter after a first-quarter decline of 61.5 per cent.
The firm attributed the falling sales to the first lockdown earlier this year when shops were closed and a demand for more casual clothes over office wear. Social distancing was also a factor, it said, as customers couldn’t try clothes on in store.
After stores reopened, the company said it still faced “substantial headwinds,” with city centre stores recording a 55-per-cent decline in clothing sales between July and September.
However, the company expects demand for occasion and formal attire to return once the recovery begin and events return.
Looking at its international franchises, M&S, which has 18 stores in the UAE in partnership with Al-Futtaim, said its international revenue declined 25.5 per cent, reflecting the “impact of lockdowns in multiple geographies in quarter one, peaking with the closure of 84 per cent of all international stores and progressive reopening in quarter two”.
“These impacts were partly offset by an international online sales increase of 75.4 per cent,” the company said.
Adam Vettese, analyst at multi-asset investment platform eToro, said M&S's revenue came in better than expected "given that the first lockdown butchered sales".
"It managed to reduce its debts, its cash levels are good and its joint venture with Ocado is making impressive progress,” he said.
“Forecasters at Springboard are predicting a 62 per cent fall in footfall in the run-up to the Christmas period, which would cap off a pretty miserable year for the retail sector. That may be enough to tip Marks to the second loss in its history, but it has shown enough resilience in recent months to suggest it can make it through this crisis quite comfortably.”
M&S is lobbying the UK government for Sunday store trading hours to be extended next month to help make up for lost trade in November's lockdown, Mr Rowe said.
"We are lobbying quite hard with the rest of the industry for the extension and de-regulation of some Sunday hours, particularly as we get closer to Christmas," he said.
On Tuesday clothing retailer Primark also called for December hours to be extended.
FIXTURES
New Zealand v France, second Test
Saturday, 12.35pm (UAE)
Auckland, New Zealand
South Africa v Wales
Sunday, 12.40am (UAE), San Juan, Argentina
Dirham Stretcher tips for having a baby in the UAE
Selma Abdelhamid, the group's moderator, offers her guide to guide the cost of having a young family:
• Buy second hand stuff
They grow so fast. Don't get a second hand car seat though, unless you 100 per cent know it's not expired and hasn't been in an accident.
• Get a health card and vaccinate your child for free at government health centres
Ms Ma says she discovered this after spending thousands on vaccinations at private clinics.
• Join mum and baby coffee mornings provided by clinics, babysitting companies or nurseries.
Before joining baby classes ask for a free trial session. This way you will know if it's for you or not. You'll be surprised how great some classes are and how bad others are.
• Once baby is ready for solids, cook at home
Take the food with you in reusable pouches or jars. You'll save a fortune and you'll know exactly what you're feeding your child.
UAE currency: the story behind the money in your pockets
Read more about the coronavirus
PROFILE OF STARZPLAY
Date started: 2014
Founders: Maaz Sheikh, Danny Bates
Based: Dubai, UAE
Sector: Entertainment/Streaming Video On Demand
Number of employees: 125
Investors/Investment amount: $125 million. Major investors include Starz/Lionsgate, State Street, SEQ and Delta Partners
Results
ATP Dubai Championships on Monday (x indicates seed):
First round
Roger Federer (SUI x2) bt Philipp Kohlschreiber (GER) 6-4, 3-6, 6-1
Fernando Verdasco (ESP) bt Thomas Fabbiano (ITA) 3-6, 6-3, 6-2
Marton Fucsovics (HUN) bt Damir Dzumhur (BIH) 6-1, 7-6 (7/5)
Nikoloz Basilashvili (GEO) bt Karen Khachanov (RUS x4) 6-4, 6-1
Jan-Lennard Struff (GER) bt Milos Raonic (CAN x7) 6-4, 5-7, 6-4
Profile of Tamatem
Date started: March 2013
Founder: Hussam Hammo
Based: Amman, Jordan
Employees: 55
Funding: $6m
Funders: Wamda Capital, Modern Electronics (part of Al Falaisah Group) and North Base Media
RESULTS
6pm: Mazrat Al Ruwayah – Group 2 (PA) $40,000 (Dirt) 1,600m
Winner: AF Alajaj, Tadhg O’Shea (jockey), Ernst Oertel (trainer)
6.35pm: Race of Future – Handicap (TB) $80,000 (Turf) 2,410m
Winner: Global Storm, William Buick, Charlie Appleby
7.10pm: UAE 2000 Guineas – Group 3 (TB) $150,000 (D) 1,600m
Winner: Azure Coast, Antonio Fresu, Pavel Vashchenko
7.45pm: Business Bay Challenge – Listed (TB) $100,000 (T) 1,400m
Winner: Storm Damage, Patrick Cosgrave, Saeed bin Suroor
20.20pm: Curlin Stakes – Listed (TB) $100,000 (D) 2,000m
Winner: Appreciated, Fernando Jara, Doug O’Neill
8.55pm: Singspiel Stakes – Group 2 (TB) $180,000 (T) 1,800m
Winner: Lord Glitters, Daniel Tudhope, David O'Meara
9.30pm: Al Shindagha Sprint – Group 3 (TB) $150,000 (D) 1,200m
Winner: Meraas, Antonio Fresu, Musabah Al Muhairi
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Champions parade (UAE timings)
7pm Gates open
8pm Deansgate stage showing starts
9pm Parade starts at Manchester Cathedral
9.45pm Parade ends at Peter Street
10pm City players on stage
11pm event ends
Killing of Qassem Suleimani
The Good Liar
Starring: Helen Mirren, Ian McKellen
Directed by: Bill Condon
Three out of five stars
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
Not Dark Yet
Shelby Lynne and Allison Moorer
Four stars
The studios taking part (so far)
- Punch
- Vogue Fitness
- Sweat
- Bodytree Studio
- The Hot House
- The Room
- Inspire Sports (Ladies Only)
- Cryo
The Perfect Couple
Starring: Nicole Kidman, Liev Schreiber, Jack Reynor
Creator: Jenna Lamia
Rating: 3/5