British retailer Marks & Spencer will step up investment in its core UK business, online and overseas, it said today, as new boss Marc Bolland set out his stall alongside a 17% rise in first-half profit.
The Dutchman, enticed from grocer Morrison's in May on a £15m sterling pay deal, said he would spend an extra £850-900m over three years to lift revenue to £11.5-12.5 billion by 2013-14 from £9.3 billion last year.
About £600m will be invested in the clothing and food group's UK shops, with plans to step up store openings, boost sales of homewares and bolster own-brand products.
A further £150m will go to the group's online business, with a goal to double revenue by 2013-14, and a similar amount will be spent on expanding overseas.
Marks & Spencer, Britain's biggest clothing retailer, said it made profit before tax and one-off items of £348.6m in the six months ended October 2, just above analysts' average forecast of £347m.
The 126-year-old group raised its dividend by 12.7% to 6.2 pence a share, the first increase for three years.
M&S had a torrid recession as shoppers switched to cheaper groceries and flocked to discount clothing chains such as Primark, whose parent company posted a forecast-beating rise in full-year profit today.
But it has bounced back, helped by new clothing ranges and cheaper 'wise buys' in food.
UK store groups in general are worried tax rises and public spending cuts aimed at reducing government debt could again hit demand. M&S said it expected a tougher second half and remained cautious about the next financial year.
However, Bolland saw no need for radical surgery. 'The business is in good shape and we have strong foundations on which to build through evolution, not revolution,' he said, adding it was eyeing an extra £50m a year in benefits from supply chain and IT improvements.
