Marks & Spencer has announced that their online services will be facing disruptions until July as a result of a cyber-attack that took place last month. Customers have been experiencing difficulties with online orders for almost a month, and the retailer anticipates that these disruptions will persist throughout June and into July as operations are restarted and scaled up. The cyber-attack is estimated to impact profits for the current year by approximately £300m, exceeding analyst expectations and representing a 30% decrease in profits.
Chief executive Stuart Machin stated that the company has been dealing with a sophisticated and targeted cyber-attack over the past few weeks, leading to a period of disruption. The attack initially affected click-and-collect and contactless payments over the Easter weekend, with online ordering being unavailable shortly after. The perpetrators, believed to be the online collective Scattered Spider using tools from the cyber-crime service DragonForce, are also suspected to have targeted other entities such as the Co-op and Harrods, but Marks & Spencer experienced the most significant impact.
Marks & Spencer is currently undergoing a turnaround strategy initiated three years ago when Mr. Machin assumed the role of chief executive. The strategy encompasses updating in-store offerings, digital technology, and back-office systems to enhance customer experience. Despite the cyber-attack disrupting services at the end of April, the company had reported promising financial results for the year ending in March, with profits before tax and adjustments rising by 22% to £875m and sales increasing by 6.1%. The incident has prompted the company to explore new and innovative ways of operating, accelerating the pace of change in response.
The cyber-attack has had various repercussions on M&S’s operations, affecting food sales due to reduced availability, as well as disrupting online sales in fashion, home, and beauty categories. The company has incurred additional costs related to waste and logistics, including manual processing requirements. While insurance is expected to cover a portion of the expenses, M&S may face further charges such as fines for data breaches, legal action, and investments in cybersecurity to safeguard against future attacks
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