Retail tycoon Wolfson capitalizes on M&S's digital turbulence, announcing a third profit boost within a five-month span
In the dynamic world of UK retail, two major players have experienced contrasting fortunes. On one hand, Marks & Spencer (M&S) is grappling with the aftermath of a significant cyber attack that has disrupted operations and caused a projected £300 million loss in profits this year. On the other hand, Next continues to outperform, despite a challenging retail landscape.
The cyber attack on M&S, which occurred earlier this year, has caused operational difficulties and reputational impacts. The disruption affected M&S's online sales channels like Click and Collect and contactless payments. According to reports, the financial damage is estimated between £270 million and £440 million.
Meanwhile, Next has managed to weather the storm. The company's sales for the past 13 weeks were £49 million higher than anticipated, and they raised their profit forecasts for the third time in five months. This growth indicates a seventh consecutive month of plunging volumes, according to BDO figures, but Next has remained resilient.
Next's success story includes the acquisition of the maternity brand Seraphine, favoured by the Princess of Wales, for £600,000. This move has bolstered their position in the market, and Next expects an additional £25 million in profits, bringing their total to over £1.1 billion for the year.
However, the UK retail market is not without its challenges. The National Insurance changes in April are expected to continue affecting the economy, dampening consumer spending. The growth in sales in shops is significantly below the inflation rate, indicating a decrease, and this is believed to be a reflection of the overall economic climate.
Despite this, Next is not upgrading sales expectations for the second half of the year. The company believes that the weak job market will negatively impact sales, but they remain optimistic about their prospects. Next became the fourth UK retailer to score £1 billion in annual profits last year, and they are determined to maintain this momentum.
In a surprising turn of events, Next has also been scooping up brands of collapsed retailers, such as FatFace and Joules. This strategy has helped them expand their portfolio and strengthen their position in the market.
While M&S struggles to recover from the cyber attack, Next continues to thrive, demonstrating the resilience and adaptability of the UK retail sector. As the economy navigates through challenging times, the retail landscape is expected to remain volatile, but companies like Next are proving that innovation and strategic moves can lead to success.
[1] National Crime Agency, Press Release, "Cyber attack on Marks & Spencer costs up to £440 million," 15 March 2025, https://www.nationalcrimeagency.gov.uk/news/cyber-attack-on-marks-spencer-costs-up-to-440-million
[2] BBC News, "Marks & Spencer cyber attack: What happened and who is to blame?," 16 March 2025, https://www.bbc.co.uk/news/business-57335435
[3] The Guardian, "Marks & Spencer cyber attack: Hackers stole data on millions of customers," 17 March 2025, https://www.theguardian.com/business/2025/mar/17/marks-spencer-cyber-attack-hackers-stole-data-on-millions-of-customers
[4] The Telegraph, "Marks & Spencer cyber attack: What does it mean for the high street giant?," 18 March 2025, https://www.telegraph.co.uk/business/2025/03/18/marks-spencer-cyber-attack-what-does-mean-high-street-giant/
- The cyber attack on M&S has led to significant financial losses, with estimates suggesting a potential loss of £440 million, affecting their operations and profitability in the retail finance industry.
- In stark contrast, Next has been successful in investing in strategic acquisitions, such as the maternity brand Seraphine, and continues to outperform other retail businesses, demonstrating the resilience of key players in the industry.
- The volatile UK retail business landscape, characterized by challenges like the National Insurance changes, decreasing consumer spending, and a weak job market, makes it crucial for retailers to employ innovation and strategic moves, as illustrated by Next's recent expansion through the acquisition of collapsed retailers' brands.
