Marks & Spencer (M&S) is ploughing ahead with its turnaround plan after half-year sales slumped during a “challenging” period for its clothing and homeware business.
The high street retailer saw sales slide by 2.1% to £4.86 million over the six months to September 28.
The company hailed the performance of its food business, which grew sales year on year, but saw clothing and home sales dive amid buying and supply chain issues.
Clothing and homeware plunged 7.8% as like-for-like sales dropped 5.5% on the back of issues around product availability.
M&S said it had “poor availability on the most popular sizes and too much stock and markdown” on its clothing lines.
But it saw a sales uplift in October after taking action to improve availability and has had an “encouraging” relaunch of its Per Una sub-brand.
M&S also reported weaker-than-expected online sales, as digital revenue jumped just 0.2%, despite an 8% increase in website traffic.
Like-for-like food sales increased by 0.9%, driven by an acceleration in the second quarter.
The company said it had benefited from price reductions on a range of core food products and almost halved its number of promotions.
This was not enough to stem falling profits, with the underlying pre-tax figure sliding by 17% to £176.5m during the half-year.
M&S said it had closed 17 stores as part of a turnaround plan that will see the closure of 100 stores around the UK.
It said it made £75m in cost savings during the period as a result.
The company also reduced its dividend by 40% to 3.9p, as it had previously indicated would happen as a result of the transformation programme.
Chief executive Steve Rowe said: “Our transformation plan is now running at a pace and scale not seen before at Marks & Spencer.
“For the first time we are beginning to see the potential from the far-reaching changes we are making.”
Mr Rowe said the timing of the December general election had not yet had any impact on trading but it was a period of “constant volatility”.
He added: “Anything that distracts consumers at this time is not good for retailers.”
Arlene Ewing, investment manager at financial services firm Brewin Dolphin, said: “Trading continues to be challenging for Marks and Spencer. There is still a lot of work to be done to transform one of the UK’s most iconic brands – especially at its struggling divisions.”