Retail giant Marks & Spencer has seen annual profits tumble by nearly two thirds and revealed sales across its under-pressure clothing arm have plunged back into reverse.
Chief executive Steve Rowe admitted the group's overhaul has "come with a cost" as he posted a 63.5 per cent plunge in bottom line pre-tax profits to £176.4 million on a comparable 52-week basis.
Underlying pre-tax profits were 10.3 per cent lower at £613.8 million in the year to April 17.
The group said sales in its clothing business dropped 5.9 per cent in the last three months with the fall compounded by the timing of Easter, marking an abrupt end to the revival seen in the third quarter, when sales rose by 2.3 per cent.
M&S said the timing of its December sale also knocked fourth quarter trading which, when combined with the Easter impact, knocked around 3.8 per cent off clothing and home sales and around 1.9 per cent off food sales.
This left like-for-like sales in its food halls 2.1 per cent lower in the quarter.
The profits plunge comes as Mr Rowe has invested heavily in slashing prices and overhauled its clothing ranges to win back customers.
Its bottom line results were also hit by the cost of its swingeing UK store closure programme, its move to pull out of 10 international markets and the decision to shut its defined benefit staff pension scheme to future accrual.
Mr Rowe said:
"As we anticipated, the planned restructuring of M&S has come with a cost and has impacted profits."
"Looking ahead, we will continue our programme of self-help in a tough trading environment," he added.
The group's disappointing fourth quarter left overall UK like-for-like sales 3.6 per cent down in the year to April 17, with a fall of 3.4 per cent across clothing and home and a more resilient 0.8 per cent decline in the food business.
M&S insisted it was "encouraged by early evidence that our strategy is working", with full-price sales up 2.7% with strong growth in the second half, and total market share stabilising at the end of its financial year.
