M&S profit set to increase pressure

Marks & Spencer is due to unveil its worst annual profits figure in four years on Tuesday after a disastrous performance in clothing.

The full-year results are expected to pile further pressure on chief executive Marc Bolland, who will be hoping last year's executive makeover at the ailing high street stalwart soon starts to pay dividends. They come a week after his new fashion team unveiled the latest attempt to turn around sales.%VIRTUAL-SkimlinksPromo%
Analysts have pencilled in underlying pre-tax profit of £658 million for the 12 months to the end of March. Estimates at the start of the financial year had been for a figure of around £710 million. It is a far cry from the retailer's heyday in 2008 when it made more than £1 billion.

The figure dipped sharply with a 40% drop the following year as the recession bit but has been climbing steadily since then until now.

Some City observers are optimistic about Marks's future amid investment of more than £800 million and after last week's unveiling of its new fashion range - which will go on sale later this year and is seen as the first test of the new executives installed in 2012. But others fear more money will need to be spent before M&S can properly recover.

In the shake-up, the retailer moved John Dixon from its successful food division to head general merchandise while former Debenhams and Jaeger boss Belinda Earl was appointed style director.

The reshuffle hit a snag earlier this year when "Knicker Queen" Janie Schaffer, hired to reinvigorate the underwear section, walked out as director of lingerie and beauty after just three months. She was replaced by Next's Jo Jenkins.

Mr Bolland has said the impact of the changes would not be felt until after this year's spring and summer lines, put together by the previous regime - making the launch of the autumn range last week a key test.

In the latest announcement, sales are forecast to be up around 1%, with a strong result from food offsetting continuing poor performance from general merchandise. But the expected fall in profits and the stark contrast with the good times of the past will underline just how far the business has to go.

The results will also mean the chief executive, who has led the retailer since 2010, missing out on much of his bonus for the third year in a row, with 60% of the £2 million pot based on targets related to profits, according to the Financial Times.
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