By James Davey

LONDON (Reuters) – Britain’s Marks & Spencer is set to report on Wednesday a 90% slump in full-year profit after the COVID-19 pandemic hammered its clothing sales.

Analysts on average expect the 137-year old M&S, one of the best known names in British retail, to report a pretax profit before one-off items of 43 million pounds ($61 million) for its year to April 3, down from 403 million pounds in 2019-20.

That outcome follows the group reporting in November a first half loss – its first loss since joining the stock market in 1926.

It reflects an expected 34% crash in UK clothing and homewares like-for-like sales, due to multiple lockdowns which shut the retailer’s non-food space, slightly offset by an expected 1.2% rise in food sales.

All UK clothing retailers have been hit hard by the crisis. Last month Primark which does not trade online, reported annual profit was down 90%. Next, which has a huge online business, has shown greater resilience but its full-year profit still fell 53%.

In 1998, M&S became the first British retailer to make a annual pretax profit of over 1 billion pounds. It repeated the feat in 2008.

Chairman Archie Norman, along with CEO Steve Rowe, has been driving the group’s latest turnaround plan.

They have looked to transform M&S’s culture, have closed stores, increased the use of technology, and improved product and value to broaden the retailer’s appeal.

Norman has called 2020-21 a “lost year” for the retailer’s profitability. But even before the pandemic hit, M&S was still struggling.

A year ago M&S said the crisis would indelibly change its business and it would speed up its plan, delivering three years of change in one. In August it cut 7,000 jobs.

Analysts at Barclays said the outlook for the year ahead is more consequential than looking back at the past year.

“We will be interested in any colour as to how trading has developed in the early part of full year 2021-22 – there could be positive noises as stores have been able to reopen and because M&S faces weak comps from this time last year,” they said.

Earlier this week, M&S promoted strategy chief Katie Bickerstaffe and food boss Stuart Machin to joint chief operating officers, marking them as the internal frontrunners to succeed Rowe.

($1 = 0.7067 pounds)

(Reporting by James Davey; Editing by Susan Fenton)

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