Ethical Hacking News
Marks & Spencer Warns of £300 Million Dent in Profits Due to Sophisticated Cyberattack
Marks & Spencer expects a £300 million ($402 million) hit to its operating profits due to the ongoing cyberattack. The company's shares have already fallen by 3% at the time of writing. The attack, attributed to Scattered Spider, has resulted in the theft of customer data including names, dates of birth, and online order histories. Online sales in its fashion, home, and beauty divisions remain unavailable until July. Marks & Spencer plans to reduce its costs by £500 million ($670 million) in time for the 2027/28 financial year. The incident has had a significant impact on M&S's market valuation, with shares down by more than £1 billion ($1.3 billion).
Marks & Spencer, a prominent British retailer, has warned that it expects to take a significant hit to its operating profits due to an ongoing cyberattack. In its fiscal 2025 profit and loss accounts for the year ended March 29, published on Wednesday, the company revealed that the disruption caused by the attack is likely to reduce its operating profits by around £300 million ($402 million). This news comes as a significant blow to the retailer's financial performance, with shares already down 3 percent at the time of writing.
According to the report, M&S has been managing a highly sophisticated and targeted cyberattack since April 22, which has led to limited periods of disruption. The attack, attributed to the English-speaking group known as Scattered Spider, has resulted in the theft of customer data including names, dates of birth, telephone numbers, home addresses, household information, email addresses, and online order histories.
The impact of the cyberattack has been far-reaching, with various divisions suffering an overall decline in operating profits. M&S reported that early on into the attack, some franchise stores, such as those inside train stations, experienced shortages of certain foods, including "meal deal" sandwiches. This reduced availability has affected food sales, and the company also incurred additional waste and logistics costs owing to the shift toward manual processes.
After briefly managing to keep online and app sales running post-breach, these were eventually taken offline along with other systems, and the company said online sales and trading profit was "heavily impacted" as a result. Online sales in its fashion, home, and beauty divisions remain unavailable and are not expected to return until July.
In an effort to mitigate the financial impact of the attack, M&S has stated that it plans to reduce its costs by £500 million ($670 million) in time for the 2027/28 financial year. The company's pre-tax and pre-adjusted profits were up 22.2 percent on the previous year at £875.5 million ($1.17 billion), which is the company's best performance in more than 15 years.
The incident has also had a significant impact on M&S's market valuation, with shares down by more than £1 billion ($1.3 billion) since April 22. However, CEO Stuart Machin remains optimistic about the company's ability to recover from this setback and continues to emphasize the importance of rebuilding customer trust.
Machin stated in the results release: "Over the last few weeks, we have been managing a highly sophisticated and targeted cyberattack, which has led to a limited period of disruption. We have tackled this head-on with incredible spirit, teamwork, and a deep sense of responsibility as we prioritised serving our customers." He also emphasized that the incident is not a reflection on the company's strategy or plans for growth.
The attack has also raised concerns about the increasing sophistication of cyberattacks targeting UK retailers. Experts have pointed out that this is not an isolated incident but rather part of a broader trend in which cybercriminals are becoming increasingly brazen and targeted.
In response to the incident, British government agents have stepped in to assist M&S in recovering from the attack. The incident highlights the importance of robust cybersecurity measures and incident response planning for retailers, as well as the need for collaboration between companies and regulatory bodies to share best practices and prevent future attacks.
The breach also underscores the ongoing threat posed by ransomware attacks, which have been increasingly used by cybercriminals to extort money from companies. The use of DragonForce ransomware in this attack suggests that the attackers are well-versed in using sophisticated tools to carry out their operations.
In conclusion, Marks & Spencer's warning about the significant impact of its cyberattack on its profits highlights the growing threat posed by sophisticated cyberattacks targeting retailers. As the UK retail sector continues to face increasing pressure from cybercriminals, it is essential for companies like M&S to prioritize robust cybersecurity measures and incident response planning to protect their customers' data and reputation.
Related Information:
https://www.ethicalhackingnews.com/articles/Marks--Spencer-Warns-of-300-Million-Dent-in-Profits-Due-to-Sophisticated-Cyberattack-ehn.shtml
https://go.theregister.com/feed/www.theregister.com/2025/05/21/ms_cyberattack_disruption/
https://www.resecurity.com/blog/article/dragonforce-ransomware-reverse-engineering-report
https://www.theregister.com/2025/05/15/dragonforce_ransomware_uk_retail_attacks/
https://www.cisa.gov/news-events/cybersecurity-advisories/aa23-320a
https://en.wikipedia.org/wiki/Scattered_Spider
Published: Wed May 21 05:03:47 2025 by llama3.2 3B Q4_K_M
