Profit before tax at Marks and Spencer plummets 62.1%

Marks & Spencer sees profits before tax decline 5.4 percent for FY18

Actions taken under the plan include the sale and franchise of the firm's retail business in Hong Kong and Macau.

M&S shares have fallen 26 per cent over the past year and it risks being booted out of the FTSE 100 index as it is now worth less than both online grocer Ocado and online fashion website ASOS, starkly illustrating how shopping habits have changed in only a decade.

Credit Suisse has predicted a 4.5% decline in pre-tax profit to £539mln in fiscal year 2018/19, driven by weak like-for-like sales but with less pressure from foreign exchange headwinds.

On Tuesday, M&S said it would close 100 United Kingdom stores by 2022, as it strives to make at least a third of clothing and home sales online. "These changes come with short term costs which are reflected in todays results".

With this plan, M&S intends to pull back itself after experiencing years of falling sales and profits.

Food revenue grew 3.9% - though like-for-like revenue slipped just 0.3% - while Clothing & Home revenue fell 1.4% and was down 1.9% on a like-for-like basis.

Marks & Spencer sees profits before tax decline 5.4 percent for FY18
M&S store closure costs result in 62% annual profit plunge

In notes attached to its results, the company said the "continued migration" of clothing and home products online; the development of global competition; the growth of home delivery in food; and "the march of the discounters" all amounted to threats to its business.

Sacha Berendji, the Marks & Spencer retail, operations and property director, said: "Closing stores isn't easy but it is vital for the future of M&S". Various other issues need to be urgently addressed, including the supply chains in both Clothing & Home and in Food requiring significant upgrades, its online capability being behind the best of its competitors and its sluggish website.

Some closures are occurring to coincide with the opening of nearby M&S food stores, the retailer noted.

The high-street chain has expanded its closure plans as it aims to shift at least a third of sales online, the group announced in a statement.

"And we're concentrating on tackling the culture of the business, making M&S a faster, lower cost and more commercial digital business".

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