Marks and Spencer reported a sharp 55.4% drop in pre-tax profits to £184.1 million for the first six months of its financial year. The British retailer attributed the decline largely to a major cyber attack that cost the company around £136 million, even after recovering a £100 million insurance payout.
The attack struck around Easter weekend, forcing M&S to halt online sales for approximately six weeks. Hackers compromised customer personal data, potentially including names, email addresses, postal addresses and dates of birth. The disruption also caused empty shelves as logistics systems were knocked offline.
Stuart Machin, the company's chief executive, acknowledged the severity of the situation. «The first half of this year was an extraordinary moment in time for M&S. However, the underlying strength of our business and robust financial foundations gave us the resilience to face into the challenge and deal with it. We are now getting back on track,» he said.
Sales Impact and Recovery
The cyber attack hit M&S's fashion business particularly hard. Online sales plunged 42.9%, while in-store sales dropped 3.4%. Overall, the fashion arm saw sales decline by 16.4%. Competitors like Next reportedly gained market share during the outage. After M&S restored its clothing, home and beauty sales online, the company experienced a surge in customer activity.
Machin said the retailer faces significant challenges ahead, including over £50 million in additional costs from national insurance increases. The company has ramped up its cost-cutting target to £600 million. Despite the difficult first half, M&S expects profits for the final six months to be at least in line with last year's performance.
Note: This article was created with Artificial Intelligence (AI).
