Top British retailer beats profit forecasts after major investment

Marks & Spencer, the United Kingdom-based retailer, showed that efforts to boost profitability in its troubled clothing business are starting to pay off even though sales fell again in the latest quarter.

M&S, a mainstay of British shopping streets for more than 130 years, also beat forecasts for first-half profit and increased its dividend, sending its shares up as much as 4.2 percent.

The performance will give a boost to Chief Executive Marc Bolland, who, rather than chasing unprofitable sales, has focused on growing gross margins - the difference between the price M&S pays for goods and the price it sells them - mainly through improvements in sourcing.