British retailer Marks & Spencer on Wednesday reported an 88 percent slump in full-year profit, reflecting a collapse in clothing sales due to the Covid-19 pandemic, and warned investors not to expect a dividend in the current year.

But it said it was making progress with its turnaround plan, had traded well in the early weeks of the 2021-22 year and that profits would recover, sending its battered shares up more than 4 percent in early trading.

M&S, which also sells upmarket food, made a pretax profit before one-off items of £50.3 million ($71.2 million) in the year to April 3, down from the £403.1 million made in 2019-20.

The 137-year old group, one of the best known names in British retail, said like-for-like clothing and homeware sales plunged 31.5 percent, damaged by multiple coronavirus lockdowns which shuttered stores.

Clothing and homeware sales in stores crashed 56.2 percent, partly offset by online growth of 53.9 percent.

In food, where space remained open during the crisis, like-for-like sales rose 1.3 percent.

On a statutory basis M&S sank to a pretax loss of £209.4 million, versus a profit of £67.2 million in 2019-20.

All UK clothing retailers have been hit hard by the pandemic. Last month Primark which does not trade online, reported a drop in annual profit of 90 percent. Next, which has a huge online business, has shown greater resilience but its full-year profit still fell 53 percent.

CEO Steve Rowe has been driving M&S’s latest attempt at a reinvention after decades of failures.

Along with chairman Archie Norman he has focused on transforming the company’s culture, while closing stores, investing heavily in technology and e-commerce, and improving product and value to broaden its appeal.

M&S reckons the pandemic has masked the progress it is making with its turnaround and said it has moved beyond the “fixing the basics” stage.

“We now have a clear line of sight on the path to make M&S special again. The transformation has moved to the next phase,” said Rowe.

M&S said trading for the first six weeks of the 2021-22 financial year had been ahead of the comparable period two years ago and its central expectations.

It forecast underlying pretax profit to recover to £300-350 million in 2021-22.

By James Davey; Editors: Kate Holton and Kirsten Donovan