EMBATTLED Marks & Spencer posted its tenth consecutive quarter of falling clothing sales today, turning the screw on chief executive Marc Bolland and his turnaround strategy for the retailer.
He admitted it had been a “challenging quarter” for clothing, footwear and homewares. “I must confess that this was not an easy Christmas,” he said.
Bolland, who took over the helm of the 130-year-old retailing icon in 2010, insisted that a vicious price war had been partly to blame.
Like supermarket giant Sainsbury’s the day before, he also pointed a finger at the poor autumn weather for a lacklustre underlying sales performance, exacerbated by widespread discounting in the high street.
“Against this backdrop, we held our full price trading stance for much of the quarter, but as the level of promotional activity in the marketplace intensified in the run up to Christmas, we responded with a number of promotions,” he said.
Many consumers had yet “to see and feel” the benefits of the economic recovery and there was a clear difference in optimism between the south of England and the rest of the UK.
The 2.1 per cent drop in M&S’s general merchandise sales, dominated by its clothing arm, disappointed the market, but was partly offset by another strong performance from the food business.
Like-for-like food sales rose 1.6 per cent in the 13 weeks to 28 December, with total food sales up 4.1 per cent. The division also saw record sales over the Christmas period, including its biggest ever trading day in food of £64 million on 23 December.
Bolland said that the group did better in clothing in the shorter eight week run-up to Christmas, when total general merchandise sales climbed 1.5 per cent and same-floorspace sales rose 0.5 per cent.
There were better figures for M&S’s online and international businesses, with sales up 22.7 per cent and 4.5 per cent respectively.
Overall like-for-like UK sales for the eight weeks to 24 Decmber were up 1 per cent but down 0.2 per cent for the quarter.
Shares in M&S jumped 16p, or 3.6 per cent. to 460.9p on a mix of food’s performance and relief that clothing – with womenswear undergoing a style makeover in the autumn – was not worse.
“Given low prior expectations, investors appear to be breathing a sigh of relief,” Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said.
“Sales have proved to be no worse than forecast. Nonetheless, performance remains a long way from rival [fashion clothier] Next.”
Another analyst said: “I thought before the results Bolland would be OK as long as the clothing figures were not absolutely disastrous, and they’re not. The City is still giving him the benefit of the doubt.”
The M&S boss brushed aside questions about his future, saying: “It is not about my own position. I am here talking about the company performance and the steps taken to improve the business.”
He said that it saw signs of improvement in its key womenswear business, resulting in small market share growth for the first time in three years, adding that its spring/summer collection had been well received by the fashion press.