By James Davey

LONDON (Reuters) – British clothing and food retailer Marks & Spencer is emerging from the COVID-19 crisis as a very different business that will surprise people with its financial performance, Chairman Archie Norman said on Tuesday.

Norman and Chief Executive Steve Rowe believe the pandemic has masked progress the 137-year-old group has made in its latest attempt at a turnaround after decades of failures.

They have focused on transforming the culture in M&S, improving the quality and value of its clothing and food products, while reshaping its store estate and investing in technology and e-commerce, including a venture with online supermarket Ocado.

“We sort of feel we’re emerging from the pandemic and lockdown, like emerging from a chrysalis, a new and reshaped business,” Norman told shareholders attending M&S’s annual general meeting, held virtually for a second successive year.

“We think we’re going to surprise a few people, not just hopefully with our financial performance but also with the things we do to demonstrate that M&S has really changed,” he said.

Norman, chairman since 2017, said the management had moved on from fixing the basics in the business.

“We’re now into a new phase and we’d like to think that new phase is about growth,” he said, adding this meant expanding sales and market share.

“We’re here to create a growing business, absolutely not in the business of managing decline, we’re investing for the future,” he said, adding the retailer was “very confident” about the year ahead.

In May, M&S reported an 88% slump in 2020-21 profit but forecast a rebound in 2021-22.

Shares in M&S closed down 2% at 154.4 pence, paring 2021 gains to 13% and valuing the business at 3 billion pounds ($4.1 billion).

($1 = 0.7259 pounds)

(Reporting by James Davey; Editing by Edmund Blair)