London, UK: Marks & Spencer said its acquisition of Gist last year delivered over £30m of benefits during the first half of its financial year. Announcing its results for the 26 weeks to 30 September, the company said: “In food, the integration of Gist has gone well, with early cost savings and multiple small improvements arising from operating in a single collaborative team. The annualised contribution from Gist from the elimination of management fees, operational savings and improved service is now running at around £60m, with benefits of over £30m delivered in the first half.
“M&S and Gist are now embarking on a multi-year programme to ‘fix the backbone’ processes and systems, including work to define long-term network requirements.” said the company.
In addition to the structural cost savings, logistics efficiencies across both main businesses (clothing/home and food) helped offset rising warehouse and transport costs, added M7S.
M&S chief executive Stuart Machin said: “Our cost reduction programme is on track, with over £100m savings delivered in the half, and investment in supply chain modernisation driving efficiencies, translating volume growth to improved margin and profitability.”
The retailer warned that the turnaround of its Ocado tie-up would take at least three years. Food sales grew 14.7%, with like-for-like sales up 11.7%. Overall, M&S reported a 75% jump in pre-tax profits, excluding adjusting items, to £360m.
