Business rival credits cyberattack on M&S for boosting profits

In a trading statement published Wednesday, British clothing retailer Next reported that it was continuing to see sales overperform in the wake of a cyberattack on its rival Marks & Spencer (M&S).

Next, which increased its profit guidance by £30 million ($39.5 million) credited “favourable weather conditions and competitor disruption” for a 7.6% surge in sales in the first half of this year.

M&S, which first announced it was managing a cyber incident in April that caused disruption into July, said in May that it expected its own annual profits to be hit by around £300 million ($395 million).

M&S’s online store and app were not fully operational again until August. According to analysis by Kantar, rivals with their own online presence — including Zara, H&M and Sainsbury’s — all experienced a sales uplift, while clothing retailers without a significant online presence, such as Primark, did not.

While the competition within the retail space allowed consumers to spend their money elsewhere despite the M&S incident, a cyberattack affecting automotive manufacturer Jaguar Land Rover (JLR) caused much more damage.

According to the nonprofit Cyber Monitoring Group, the disruption to JLR cost the British economy £1.9 billion ($2.5 billion) including the hit to JLR’s own output as well as its multi-tier manufacturing supply chain, and downstream organizations such as dealerships.

It follows opposition lawmakers last week saying it was “deeply concerning” that the British government has still not introduced new cybersecurity laws to Parliament that would improve security standards for critical infrastructure.

At the time, a government spokesperson said: “The Cyber threats we face are sophisticated, relentless and costly. Our Cyber Security and Resilience Bill will be introduced to Parliament this year and is designed to strengthen our cyber defences - protecting the services the public rely on so they can go about their normal lives.”