Marks & Spencer Shock Decline in Profit: 99% Decrease

Marks & Spencer (M&S), as one of the UK’s established retail brands, experienced an unexpected collapse in the first half of 2024. The company faced a serious crisis following a major cyber attack during the Easter holiday. This attack resulted in the shutdown of M&S's website and a transition to a manual ordering system. This negative development in the company's digital transformation process directly impacted its profits.

As a result of the cyber attack, Marks & Spencer's half-year profit decreased by £324 million, almost bringing it to zero. Events like this in the retail sector not only create financial losses but also undermine customer trust. Although M&S took necessary measures to mitigate the effects of the attack, temporary issues caused significant disruptions in reaching customers.

Additionally, Marks & Spencer managed to receive a reimbursement of £100 million under insurance to address this adverse situation, but this amount proved insufficient considering the scale of the overall loss. The company's senior management will have to take a series of strategic steps to compensate for the losses. However, some analysts point out that such cyber attacks could serve as a cautionary tale for other retailers in the sector. This situation could undermine the general public's trust in large brands.

The collapse experienced by Marks & Spencer may leave lasting effects not only on its financial statements but also on its brand image. The company's competitive strength will depend on customer trust as well as the effectiveness of its cybersecurity measures. The retail industry will have to carefully manage the risks posed by technology while striving to strengthen customer relationships. Therefore, a comprehensive transformation process is expected in the sector to prevent the recurrence of such incidents.