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British Retailer Marks & Spencer’s half-year profits have more than halved as a result of a cyberattack that brought its online business to a halt.
In a statement on Wednesday, M&S said its underlying pretax profit fell 55.4% to 184.1 million pounds ($240 million) in the six months to September 27, mainly due to a 40% drop in online home and fashion sales after halting website orders. Solid food sales helped cushion the blow.
M&S had to halt all online sales for almost six weeks and suffer empty shelves due to disruption to its logistics systems after hackers targeted the business around the Easter weekend. The company said the attack was caused by “human error.”
It lost £324 million in sales because of the hack, but was able to recover £100 million through insurance payments.
It said the attack would impact profits by about £136 million, including about £34 million in the last six months of the year.
The main business affected was the fashion arm of M&S, with total sales down 16.4% in the first half of the year, while online sales fell 42.9%.
In one of the most disruptive hacks in British corporate history, the hackers also accessed customers’ personal data, which may have included names, email addresses, postal addresses and dates of birth, taken by the hackers.
Stuart Machin, chief executive of M&S, said, “The first half of this year was an extraordinary moment for M&S.” “We’re back on track now.”
M&S resumed home delivery in June following the hack, but did not resume click and collect orders until August.
The company said online sales are improving and the group expects the overall business to fully recover by the end of its financial year. However, it said the “recovery” in fashion, home and beauty has been slower than in food.
Dan Coatsworth, Market Head aj bellSaid that M&S’s “disastrous summer” could have long-term effects on the company.
“While the sun was shining, its rivals created a ruckus, including the name Next, which drove customers away from M&S during a long period of disruption,” he said. “M&S says the recovery in clothing trading has been slower than in food, suggesting that some people who have tasted the flavors of rival retailers won’t necessarily come back as quickly.”
M&S is not the only British retailer to suffer disruption to its business as a result of a cyber attack. Harrods, luxury London Departmental stores and co-ops have also been the target. It is unclear whether the three attacks are linked and a police investigation is ongoing.
expertsIncluding people from UK National Cyber Security Center Saying that Generative Artificial Intelligence is intensifying the threat landscape, and companies and individuals need to stay on top of developments and strengthen their defenses against cyber attacks.