Bolland under pressure as M&S clothing disappoints

Chief executive of M&S Marc Bolland has promised an improvement in figures by autumn. Picture: Getty
Chief executive of M&S Marc Bolland has promised an improvement in figures by autumn. Picture: Getty
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MARKS & Spencer is expected to report weak sales in its core clothing and homewares division this week, piling more pressure on chief executive Marc Bolland.

One investor has already given him notice that he must improve the figures if he is to stay in his job.

Trading in the final quarter has been poor with women’s clothing in particular struggling to make headway.

Analysts expect underlying general merchandise sales, which include clothing and homewares, to slide by 4.5 per cent, with some expecting a 6 per cent fall. It is thought Bolland will introduce a new range, M&S Collection, probably replacing M&S Man and M&S Woman, which he only launched a little more than two years ago.

The company suffered a difficult Christmas and Bolland has promised there will be an improvement by the autumn, by which time stores should be selling the first products from the new team he has created to revitalise the business.

John Dixon, former head of food, is now running clothing with the help of Belinda Earl – a former chief executive of Aquascutum, Debenhams and Jaeger – who joined last year as style director. The company will showcase its autumn- winter collection next month.

But the figures to be released this week will not make pretty reading. Analysts at Nomura reckon year-on-year clothing sales will be down by a double-digit percentage figure for the four weeks to the middle of February.

Analysts at Shore Capital said M&S is likely to have endured a “horrible” fourth quarter in general merchandise.

They said: “M&S ladies- wear has been haemorrhaging market share for some time now and the fourth quarter update could make for pretty challenging reading for investors.”

The City expects like-for-like food sales to grow 3 per cent, with overall group profits set to be around £660 million later this spring.

Despite its lacklustre performance, M&S’s shares have risen about 12 per cent over the past year, lifted by speculation over a possible £8 billion bid from the Qatar Investment Authority, plus wider market exuberance.

Bolland has blamed the lacklustre performance of general merchandise on bad weather, buying mistakes, stock availability and competitor promotions.

In bitterly cold weather in February last year, the group ran short of knitwear, jackets and outerwear. Earlier this year, David Cumming – head of equities at Standard Life Investments – said Bolland would have up to nine months to turn the situation around.

One retail analyst said Bolland had not been a particularly “lucky” general.

Last year was the second wettest on record which hit clothing sales and his time at M&S had coincided with a poor consumer backdrop. However, other retailers – such as Debenhams, John Lewis and Next have all done markedly better.