LONDON (CNNfn) - Marks & Spencer posted a sharp fall in first-half earnings Monday, though Britain's largest clothing retailer said it had turned the corner after a turbulent 12 months.
Pre-tax profits slid 43 percent to £192.8 million ($318 million) from £337.4 million a year earlier, in line with expectations after the company issued a profit warning in September, its second of the year.
Group sales fell 3.1 percent to $3.69 billion as fierce competition in the U.K. supermarket sector also impacted food sales. However, clothing sales were worst hit, with a 10 percent fall in the 26 weeks ending Sept. 26.
Like-for-like sales across all product lines, a key measure of sales performance, fell 7.9 percent.
Chief executive Peter Salsbury attempted to provide an upbeat assessment of prospects. The troubled company has rapidly lost its mantle as the country's most profitable retailer after a series of unsuccessful acquisitions, criticism of its clothing lines and management squabbles.
Marks & Spencer shares (MKS) fell 3 percent at the open before firming to trade at 281 pence, a loss of 0.5 percent.
Salsbury said M&S, as the company is popularly known, will accept credit card payments for the first time starting in the spring, raise £400 million from property sales and aim to cut £450 million from its annual cost base by 2002.
He said there were signs of improvement in sales after a difficult six months, partly prompted by a round of discounting.
M&S has sought to revamp distribution and supply agreements, shifting its focus to more overseas suppliers. Its international aspirations have also been curtailed under Salsbury. While it has retained its loss-making Brooks Brothers chain in the United States, 25 Kings supermarkets were sold earlier this year.
The remaining overseas operations posting an operating loss of £20.1 million in the first half.