Marks & Spencer profits tumble to lowest level in four years as clothing range struggles to impress shoppers

Profits at Marks & Spencer have slumped to their lowest level in four years amid a succession of fashion disasters with dowdy designs and lack of stock.Profits for the last financial year were down by six per cent to £665.2million taking them well below the £1billion plus made as recently as 2008.Chief executive, Marc Bolland, admitted its fashions ‘have not been good enough’, but he said a new Autumn/Winter collection has been well received.

'Not good enough': A customer looks at a display in a London branch of M&S today, as the retailer's financial results revealed a slump in clothing sales

More positive: Shoppers are seen browsing the food hall in M&S - an area of the High Street flagship's business that has seen growth

Despite losing market share to budget rivals such as Primark, Marks & Spencer remains the UK’s biggest clothing retailer.

 

Asked about the poor performance in fashion, Mr Bolland admitted: ‘It's been not good enough but still we have got the largest business in the UK by far.’

He said M&S is beating rivals on quality and is now aiming ‘to bring something that really delights and surprises the customer’.

He added: ‘Secondly, it's about style. We can bring improved style, more trends to customers than we have done so far and where we have done that in our womenswear it has really helped.’

News of the fall in profits came as the group revealed that the man who recreated the image of Marks & Spencer in the mid-2000s - with its ‘food porn’ TV ads and the return of Twiggy - is leaving.

The loss of marketing guru Steven Sharp will add to the turmoil in the upper echelons of M&S since Mr Bolland took over three years ago.

The blood-letting has claimed a number of high profile executives, including the much-hyped head of lingerie, Janie Schaffer, who left after just three months.

Under pressure: The results will mean no let-up in the pressure on chief executive Marc Bolland to turn around the high street stalwart

Tumbling: Marks & Spencer's annual profits have fallen to their lowest level in four years, the retailer's full year results revealed today

Mr Sharp was credited with creating the Your M&S brand and signing off the food commercials which carried the slogan, ‘This is not just food, this is M&S food’.

The TV campaign, which carried a voice over by Dervla Kirwan, helped sales of products such as its melt in the middle chocolate pudding, which soared by 3,500 per cent.

At the same time, the decision to sanction the use of Twiggy, together with Erin O'Connor, Laura Bailey and Noemie Lenoir, delivered a remarkable boost in sales.

The Twiggy-effect saw a cream three-quarter-sleeve blouse sell more in one week than any other product in the history of M&S.

A collection of £119 travel bags had to be re-ordered to cope with demand as M&S brushed aside its high street competition.

However, the must-have items have disappeared in the last two years apart from the odd exceptions, such as a lingerie collection carrying Rosie Huntington Whiteley’s name.

The company is pinning its hopes on a new upmarket Autumn and Winter collection devised by the former boss at Debenhams and Jaeger, Belinda Earl.

Blow: Marks & Spencer's autumn/winter collection for 2013 was well-received by fashion pundits, but figures show clothing sales have slumped

The fashion press has welcomed the range, although analysts fear some of the lines will be too expensive for its core customers.

'Strong progress': Mr Bolland, pictured with M&S model Rosie Huntington Whiteley, said clothing sales were 'not good enough'

The womenswear collection includes a British-made wool double-breasted coat at £349. A new ‘Best of British’ line in menswear includes a grey windowpane check single-breasted wool suit at £799 and handmade double monk strap leather shoes at £285.

While the company’s recent record on clothing and general merchandise has been poor, M&S has largely been rescued by the success of its food.

Figures published today showed underlying sales of general merchandise in 2012/13, including clothes, were down by 4.1per cent, while food was up by 1.7per cent.

Once, the impact of new stores, overseas and internet sales were added to the equation, total sales were up by 1.3per cent. Despite this small increase, underlying profits fell from £687.2m to £665.2m.

City analysts were not surprised by the bad news and suggested the pressure is on Mr Bolland to deliver an improvement or move on.

Retail expert at Zolfo Cooper, Peter Saville, said: ‘M&S has repeatedly tried and failed to reinvigorate its fashion offering and appeal to a younger audience

‘Bolland’s future with the retailer is likely to depend on whether the current efforts to turn the retailer around pay off.’

John Ibbotson, director of consultants Retail Vision, complained: ‘M&S seems like a rabbit in the headlights. However many operational improvements it makes, it's all immaterial unless the retailer can rediscover its panache.’

James McGregor, director of retail consultants, Retail Remedy, said: ‘Poor numbers were widely expected from M&S and in that respect the retailer certainly didn't disappoint.

‘I'm worried that M&S may not have done enough for its core customer.’

Mr Sharp, who is 62, said he is leaving to develop a portfolio of business interests. He is being replaced by Patrick Bousquet-Chavanne, who is currently the M&S director of strategy and was previously group president at Estee Lauder.

This leaves two foreigners, Mr Bolland, who is Dutch, and Mr Bousquet-Chavanne, who is French, in the two most important roles at the iconic British retailer.