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US figures take shine off M&S

Nigel Cope
Tuesday 23 May 1995 18:02 EDT
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BY NIGEL COPE

A slump in profits at its Brooks Brothers subsidiary in the United States knocked the gloss off increased profits at Marks & Spencer last year as chairman Sir Richard Greenbury warned yesterday that Britain's high streets would remain a tough battleground.

Profits at Brooks Brothers fell by two thirds to pounds 5.9m. The upmarket stores have failed to adapt to increased demand for casualwear.

Sir Richard admitted mistakes had been made but said a new chief executive had been appointed: "We paid too much for the business - fine. But we will soldier on until we get it right. But it is small beer in the context of this business."

M&S saw group pre-tax profits rise by 8.5 per cent to pounds 942m in the year to 31 March, confirming M&S as Britain's most profitable retailer. UK profits increased by seven per cent to pounds 845m, helped by strong performances in clothing and food, although home furnishings sales increased by only two per cent. Group sales increased by four per cent to pounds 6.8bn.

Sir Richard said: "The days when it is easy to make profits in retailing are over. It sorts the men from the boys.We have shown we can operate effectively without discounting. We're optimistic for the future."

European profits fell to pounds 21m as a result of reduced margins. Profits from financial services were up 18 per cent though the company said it was too early to monitor sales of pensions and life assurance policies, which began earlier this month.

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