Marks & Spencer (M&S) confirmed on Wednesday that the cyberattack disclosed in April will cost the British retailer approximately £300 million ($403 million) in lost operating profit, with disruption to its online operations expected to continue into July.
The attack, described by the company as “highly sophisticated and targeted“, forced M&S to shut down its automated stock systems, temporarily reverting to manual, pen-and-paper processes to manage billions of pounds worth of fresh food, clothing, and home goods. The fallout led to empty food shelves, delayed deliveries, and significant customer dissatisfaction.
Financial and Operational Impact
The cyberattack has been a major blow to M&S during a crucial period in its ongoing turnaround strategy. It has already:
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Wiped more than £1 billion off M&S’s market value,
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Halted online clothing, home and beauty sales, which have been “heavily impacted”,
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Caused reduced food availability, higher waste, and increased logistics costs.
Despite this, in-store sales have remained “resilient,” and food sales recovered over the past week.
CEO Stuart Machin said the company expects 85% of online clothing and home items to be back on the site in the coming weeks. However, the full system restart will continue into July.
M&S reported £984.5 million in operating profit for the year ended March 29. It expects to mitigate some of the projected £300 million loss through insurance claims, cost-saving measures, and operational recovery.
Source and Method of Breach
Machin reiterated that the breach did not result from a failure in M&S’s own cybersecurity infrastructure. Instead, hackers gained access via “social engineering” at a third-party contractor. The attackers used deceptive methods to trick employees, breaching external access points rather than M&S’s internal systems.
“We didn’t leave the door open. This wasn’t anything to do with underinvestment,” said Machin.
The National Crime Agency has linked the incident to a group of young, English-speaking hackers, part of a wider pattern of cyberattacks affecting UK institutions including the British Library, London Underground, and blood testing services.
Market Reaction and Outlook
Despite the disruption, M&S shares rose 2% on Wednesday, reflecting investor confidence in the company’s recovery efforts. The stock is still down 9% since the attack.
Archie Norman, M&S chairman, acknowledged the setback but remained optimistic about the company’s broader transformation:
“Just as you think you’re onto a good streak, events have a way of putting you on your backside.”
Analysts said M&S’s strong underlying performance — with adjusted pretax profit up 22.2% and sales rising 6.1% to £13.9 billion — suggests its turnaround remains intact. The clothing and food divisions both gained market share, reinforcing the company’s momentum before the attack.
Nevertheless, competitors like Next, John Lewis, Tesco, and Sainsbury’s may benefit from M&S’s temporary online absence.
Cybersecurity Response
M&S stated that it will use the crisis to accelerate improvements in its technology infrastructure, emphasizing the importance of resilience in the face of rising global cyber threats.
The retailer also disclosed a £248.5 million non-cash impairment charge, linked to longer-term digital and operational investments affected by the incident.
