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M&S Faces Up to Past Errors as Food and Clothing Sales Fall

Short selling — in which investors seek to profit from selling borrowed shares and later buying them back at a lower price — has spiked, with nearly 16 percent of M&S stock on loan, according to IHS Markit data. That’s the second-highest level of any company in the U.K.’s benchmark FTSE 100 index. The one-time charges reflect past missteps. Rowe pulled back from former CEO Marc Bolland’s costly and unprofitable international expansion, wrote down the value of ageing stores and swallowed the cost of closing many of them. As sales dwindled, Bolland assuaged investors by increasing profit margins. But as rivals cut prices, M&S lost competitiveness in clothing and food. Norman has mandated more price reductions in an effort to kick-start sales. After the company lost a step in e-commerce, Bolland sought to challenge Amazon.com Inc. by building a highly automated facility that opened five years ago. It cost more than 200 million pounds but remains unreliable, slowing M&S’s processing and delivery of orders. The online business grew by 5.2 percent last year, less than half of the rate of its closest rival, Next Plc, which has a bigger online business.

For the original version including any supplementary images or video, visit https://www.bloomberg.com/news/articles/2018-05-23/m-s-store-closures-dent-profit-as-demand-withers-across-business

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