Marks & Spencer continues to reshape its high street presence whilst recovering from significant challenges in 2025. The retail giant faces a complex landscape of cyber recovery, strategic closures, and ambitious expansion plans that define its current trajectory.
Recent Strategic Changes Rock M&S Operations
The company announced sweeping changes across its estate this month, including the closure of 11 cafés in smaller food stores. This decision affects fewer than four per cent of M&S’s 316 food shops as part of a wider £300 million investment programme.
M&S leadership emphasised that no job losses will occur, with all affected staff redeployed within their existing stores. The closures aim to create additional space for popular food products whilst modernising the customer experience.
The retailer simultaneously welcomed Paula Bricks as its new Fashion, Home and Beauty retail director, effective November 2025. Bricks brings nearly 19 years of experience from COS, where she served as store experience director.
Her appointment signals M&S’s commitment to elevating store standards and operational excellence across its Fashion, Home and Beauty division. The role proves critical in supporting the company’s shift from multi-channel to omnichannel operations.
Cyber Attack Aftermath Continues to Impact Operations
M&S faced a sophisticated cyberattack in April 2025 that disrupted operations for nearly four months. The ransomware attack, allegedly perpetrated by the DragonForce group, forced the company to halt online orders for clothing and home deliveries.
Click and collect services remained suspended until August, finally resuming after 15 weeks of disruption. The incident cost M&S approximately £300 million in operating profits, though insurance recovery could offset up to £100 million of losses.
Customer data including home addresses, phone numbers, and dates of birth was compromised during the breach. The attack highlighted vulnerabilities in M&S’s digital infrastructure whilst competitors like Next and Sainsbury’s gained market share.
CEO Stuart Machin indicated the company would move past the worst impacts by August 2025. The disruption accelerated M&S’s technology transformation plans as leadership viewed the crisis as an opportunity to strengthen systems.
Financial Performance Shows Resilience Despite Challenges
M&S delivered impressive financial results for the 52 weeks ending March 2025, recording its highest profits in over 15 years. Adjusted pre-tax profits jumped 22.2% to £875.5 million, whilst total revenue increased 6.0% to £13.8 billion.
Food sales drove significant growth, rising 8.7% to £9.0 billion with an operating margin of 5.4%. Fashion, Home and Beauty sales increased 3.5% to £4.2 billion, achieving an 11.2% operating margin.
The strong performance occurred before the cyberattack impact, which is expected to reduce 2025/26 operating profits by approximately £300 million. International sales declined 7.1% in constant currency to £700 million, reflecting ongoing challenges in overseas markets.
Free cash flow reached £443.3 million, supporting a 20% dividend increase to 3.6p per share. The company maintained net funds of £437.8 million excluding lease liabilities.
Store Transformation Programme Gains Momentum
M&S accelerated its property transformation programme, completing 47 deals in the past year – more than the previous three years combined. The retailer plans to invest over £300 million in store rotation and renewal during 2025.
The programme includes opening 16 new stores, extending nine locations, and renewing 12 existing sites. All new and renovated stores feature M&S’s latest format with wider aisles, bright entrances, and modern displays.
Twelve new food halls will launch alongside two full-line stores and two outlets, including flagship locations at Bath Southgate and Bristol Cabot Circus. The company targets 180 full-line stores and 420 food halls by the end of 2028.
M&S evaluates over 300 potential new sites across the UK, from Elgin to Exeter, as it strengthens its nationwide presence. The Aberdeen Union Square store reopened with a 48,000 square foot fashion, home and beauty department.
Food Division Continues Strong Growth Trajectory
The food division maintained exceptional performance with like-for-like sales growth of 8.6% driven by volume increases. Recent NielsenIQ data showed food sales accelerated to 6.7% year-on-year growth over 12 weeks to August as cyber impacts faded.
M&S food benefits from premium positioning and quality perception amongst UK consumers. The division’s operating margin of 5.4% exceeds management targets whilst supporting broader business profitability.
Ocado Retail joint venture losses continued to impact earnings despite volume growth of 30.3%. The partnership focuses on delivery efficiency improvements and network utilisation before investing in new capacity.
Food halls represent a key growth driver as M&S targets expansion to approximately 420 locations by 2028. The format proves popular with customers seeking convenience and quality food options.
Fashion Recovery Shows Promise Despite Market Challenges
UK clothing and home like-for-like sales grew 4.4% supported by increased online penetration. This performance occurred amid sluggish apparel market conditions affecting many retailers throughout 2025.
The Fashion, Home and Beauty division achieved an 11.2% operating margin, demonstrating improved efficiency and product mix optimisation. Online services fully resumed by August following the cyberattack disruption.
Paula Bricks’ appointment signals renewed focus on store experience and operational excellence within the division. Her extensive COS background brings valuable insights into accessible luxury fashion retail.
M&S continues investing in omnichannel capabilities to seamlessly integrate online and offline shopping experiences. The company aims to capture market share as fashion consumption patterns evolve post-pandemic.
Share Price Performance Reflects Mixed Investor Sentiment
M&S shares experienced volatility throughout 2025, declining approximately 11% year-to-date despite strong underlying performance. The cyberattack impact weighed heavily on investor confidence and near-term earnings prospects.
Shares reached five-year highs in April before the cyber incident, having quadrupled from 2022 lows. Current trading around 387p reflects uncertainty about recovery timelines and future growth prospects.
Analysts maintain price targets averaging 431p with estimates ranging from 375p to 450p. Morningstar maintains a fair value estimate of 342p with a three-star rating.
Some forecasts suggest potential appreciation to 668p by December 2025, representing significant upside if transformation plans succeed. The company’s strong balance sheet and cash generation support dividend sustainability.
Expert Analysis Points to Long-Term Optimism
Industry analysts remain broadly positive about M&S’s transformation prospects despite short-term challenges. Morningstar’s research team expects the cyberattack disruption to have minimal long-term impact on valuation.
The retailer’s ability to outperform UK market conditions demonstrates successful strategy execution. Cost efficiency initiatives delivered £120 million in savings whilst supporting margin expansion.
Investec analyst Kate Calvert highlighted the click and collect resumption as a significant “back to normal” indicator for consumers. The technological infrastructure improvements should strengthen future operational resilience.
M&S’s focus on store rotation and format optimisation aligns with evolving consumer preferences for convenience and experience. The food division’s premium positioning provides defensive characteristics during economic uncertainty.
For more UK football culture and fan insights, explore these related reads:
Manchester United transfer developments, Kayserispor vs Galatasaray standings, Bulgaria FC updates, FC Copenhagen news, FC Cincinnati standings, and Chelsea lineup analysis.
Future Outlook Remains Cautiously Optimistic
M&S enters the final quarter of 2025 with renewed momentum following cyber recovery completion. The £300 million investment programme should accelerate store modernisation and customer experience improvements.
Management expects capital expenditure between £600-650 million in fiscal 2026 to support transformation initiatives. The company’s strong cash generation and balance sheet provide flexibility for strategic investments.
International operations require continued attention following recent sales declines and strategic repositioning. The focus on UK market growth may prove more sustainable given domestic competitive advantages.
Technology infrastructure enhancements should prevent future cyber vulnerabilities whilst supporting omnichannel development. The retailer’s ability to maintain customer loyalty during disruption demonstrates brand strength.
Frequently Asked Questions
What caused M&S’s recent café closures?
M&S closed 11 cafés in smaller food stores to create space for more popular food products as part of a £300 million modernisation programme. The closures affect fewer than 4% of their 316 food shops, with no job losses as staff are redeployed.
How much did the cyberattack cost M&S?
The sophisticated ransomware attack in April 2025 is expected to cost M&S approximately £300 million in operating profits. However, insurance recovery and cost mitigation measures could offset up to £100 million of these losses.
What are M&S’s expansion plans for 2025-2028?
M&S aims to operate 180 full-line stores and 420 food halls by the end of 2028. The company is investing over £300 million in store rotation and renewal, opening 16 new stores and renovating multiple existing locations.
How has M&S’s financial performance been in 2025?
M&S delivered its highest profits in over 15 years with adjusted pre-tax profits of £875.5 million, up 22.2%. Total revenue increased 6.0% to £13.8 billion, driven by strong food sales growth of 8.7%.
When did M&S fully restore online services after the cyberattack?
M&S restored click and collect services in August 2025 after 15 weeks of disruption. Full online delivery services for fashion, home and beauty resumed by August, allowing customers to shop and return items normally.
To Read More- Liverpooldaily
Leave a Reply