Last checked at 
* First half underlying profit fall in line with forecasts
* Clothing & home sales down 5.5%, food up 0.9%
* Improved sales performance in clothing & home in October
* CEO says seeing potential from changes being made
* Shares up 5.7%
(Adds detail, shares)
LONDON, Nov 6 (Reuters) - Britain's Marks & Spencer
reported on Wednesday a 17% drop in first-half profit, dragged
down by falling clothing sales, illustrating the bumpy path of
its latest attempt at a turnaround after over a decade of false
dawns.
Shares in the 135-year-old M&S, one of the best known names
in British retail, have fallen 36% over the last year and in
September the group lost its place in the prestigious FTSE 100
index.
But the stock was up 5.7% at 0807 GMT after it said it was
planning for some improvement in trading in its second half and
said its programme was making progress.
M&S set out on its latest "transformation" plan shortly
after retail veteran Archie Norman became chairman in 2017 to
work alongside Chief Executive Steve Rowe, who has been with the
company for 30 years and became its boss in 2016.
Norman said in May last year the firm was targeting
sustainable, profitable growth in three to five years and has
been instrumental in speeding up the pace of change, with the
firm closing weaker stores, revamping ranges and investing
online.
His boldest move yet was striking a 1.5 billion pound
($1.93 billion) joint venture with online grocer Ocado
to give M&S a home delivery service for food.
Despite the profit fall Rowe remained upbeat.
"Our transformation plan is now running at a pace and scale
not seen before at Marks & Spencer," he said. "For the first
time we are beginning to see the potential from the far reaching
changes we are making.
"In clothing and home we are making up for lost time. We are
still in the early stages, but we are clear on the issues we
need to fix."
BETTER OCTOBER
M&S made a pretax profit before one-off items of 176.5
million pounds ($227.3 million) in the six months to Sept. 28.
That was in line with analysts' average forecast but down from
213.0 million pounds made in the same period last year.
First-half clothing and home like-for-like sales fell 5.5%,
impacted by availability and supply chain issues. Food sales
increased 0.9% on the same basis, driven by volume as prices
were cut.
The group said it had seen an improved sales performance in
October in clothing and home, though it cautioned that market
conditions remain challenging.
In July Rowe sacked Jill McDonald, the head of its clothing
division, days after he publicly criticised chronic
availability, and assumed direct leadership of the division
himself.
The departure of supply chain director Gordon Mowat followed
and in September M&S said finance chief Humphrey Singer was also
leaving after little more than a year in the role.
Rowe said M&S had improved the styling and value of its
clothing for the autumn/winter season and was trading the ranges
with improved availability and shorter clearance periods.
"In some instances dramatic sales uplifts in categories
where we have restored value, style and availability illustrate
the latent potential and enduring broad appeal of our brand," he
said.
($1 = 0.7766 pounds)
(Reporting by James Davey, Editing by Paul Sandle)
