M&S suffers another sales fall in clothing
Like-for-like sales in M&S’s clothing and home arm fell by 2.7 per cent in the 13 weeks to 26 March.
This was better than analysts’ consensus forecast of a 3.4 per cent decline and a third quarter drop of 5.8 per cent, but it means the division has enjoyed just one quarter of like-for-like sales growth in five years.
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Hide AdNew chief executive Steve Rowe, who has just taken over from former Morrisons boss Marc Bolland, said: “Although the sales decline in clothing and home was lower than last quarter, our performance remains unsatisfactory and there is still more we need to do.
“Turning around our clothing and home business by improving our customer offering is our number one priority.”
While Mr Bolland oversaw a good performance at M&S’s food business, he struggled to improve sales in the clothing division which contributes about 60 per cent of M&S’s profit.
M&S is due to report financial results for 2015-16 next month and Mr Rowe said he would provide more details on his plans then.
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Hide AdProgress at the food business also stalled. Its like-for-like sales were flat in the fourth quarter, ending a run of six years of growth.
Analyst Clive Black at Shore Capital said: “New Marks & Spencer CEO, Steve Rowe, presented well in his first analyst briefing to our minds.
“Following on from Lord Wolfson’s (Next CEO) recent comments on the clothing market, we noted with interest his point that consumer confidence had dipped off in the last month alone. Events and Brexit seem to be weighing on folks’ minds. Whilst a constraint, Mr Rowe went on to point out that there remains a lot for M&S to do in order to improve under its own steam.”
Laith Khalaf, senior analyst at Hargreaves Lansdown, added: “Clothing continues to be a rather large millstone around Marks and Spencer’s neck, with yet another quarter of declining sales. New boss Steve Rowe intends to tackle this problem head on, but we have to wait until May to get details of his strategy to revitalise the brand.
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Hide Ad“The strong growth in online sales is encouraging, but this bright light does serve to highlight quite how gloomy things are on the shop floor.”
Mr Rowe’s biggest challenge will be to arrest the decline in womenswear sales, which have struggled to compete with the fast fashion of Zara and Primark.
Womenswear was described by former M&S clothing head John Dixon as “the golden key to the golden door” because of the beneficial effects it has on other parts of the business.
Having invested billions of pounds with big name designers and high profile launches, M&S said it had seen some improvements across the clothing range, with sales from the Autograph brand up 10 per cent.
M&S’s latest move to revive women’s clothing sales came in February when it sealed a tie-up with TV presenter Alexa Chung to launch a fashion collection inspired by the company’s extensive range.