High street stalwart Marks & Spencer has revealed staggering financial damage from a sophisticated cyber attack, with pre-tax profits collapsing by more than half in the first half of the year.
The retail giant reported profits plummeting to £127.6 million for the six months to September 28th, down dramatically from £360.2 million during the same period last year. This represents a devastating 64.6% decline that executives directly attribute to the aftermath of the security breach.
System Paralysis and Recovery Costs
The cyber incident, which struck earlier this year, forced the temporary shutdown of critical systems across M&S's operations. While customer financial data remained secure, the attack caused significant disruption to:
- Inventory management and supply chain operations
- Online order processing and delivery tracking
- Internal communications and administrative functions
Chief executive Stuart Machin described the attack as "sophisticated" and acknowledged the substantial costs involved in restoring systems and implementing enhanced security measures.
Mixed Performance Across Business Units
Despite the cyber security challenges, M&S reported some positive underlying trends. Food sales showed resilience with a 3.5% increase, though clothing and homeware sales dipped by 2.5%.
The company's Ocado retail joint venture demonstrated particular strength, achieving profitability for the first time and contributing £38.5 million to the results.
Market Reaction and Future Outlook
Investors responded cautiously to the news, with shares experiencing volatility following the announcement. The company maintained its full-year profit guidance, suggesting confidence in recovery efforts and underlying business strength.
This incident serves as a stark reminder of the growing cyber security threats facing major retailers and the substantial financial impact such attacks can deliver, even to established industry leaders.
