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Profits drop at UK retailer
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November 7, 2000: 4:03 a.m. ET
Marks & Spencer: 5% dip in underlying half-year pretax profit
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LONDON (CNNfn) - Marks & Spencer PLC reported Tuesday a 5 percent drop in first half pretax profit before special items, but still topped analysts' estimates, as the largest clothing retailer in Britain struggled to remake its tarnished image amid poor market conditions.
M&S, parent of Brooks Brothers in the United States, posted first-half pretax profit before one-time items of £183.4 million ($265 million), down from £192.8 million a year earlier. That topped analysts' expectations -- top-end forecasts were for £173 million, Reuters reported.
Sales rose 1.2 percent to £3.8 billion. However, in the five weeks since the end of the fiscal first-half period, the company reported an 8.4 percent drop in sales on a comparable basis to a year ago.
Shares of Marks & Spencer (MKS) added 1 pence, or 0.5 percent, to 186 pence in London trade, recovering from a drop as low as 168 pence shortly after the announcement. 
Chairman and Chief Executive Luc Vandevelde said the company still has a way to go to revive its image, saying "the organization has lost sight of some of the basics of retailing... There are no quick fixes."
Vandevelde took the helm of Marks & Spencer in September after the retailer dumped its former head Peter Salsbury.
The company's High Street icon has been tarnished by weak results in recent quarters and an inability to match the growth of its peers. It earlier this year launched a re-branding campaign to try stem the profit decline.
Marks & Spencer has been beset by stiff price competition from newer rivals. M&S said it lost market share in menswear in the year's first half, in a market that it said shrunk about 3 percent from a year earlier. Sales were flat in women's clothing, while sales of home products jumped 13 percent - an area seen as promising.
Marks & Spencer's overseas operations - particularly in the United States -- were a bright spot, posting a 5 percent revenue increase. Sales at its preppy Brooks Brothers clothing chain jumped 17 percent, while U.S.-based Kings Super Markets tallied a 14 percent rise in sales. The operating result in the international segment was close to break-even, following an operating loss of £20.1 million a year ago. 
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