Comment: M&S delivers a golden egg for Eastertime

Martin Flanagan

Martin Flanagan

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IT HAS taken what has sometimes seemed an unconscionable time, but Marks & Spencer’s flagship clothing division has achieved its first rise in like-for-like sales in nearly four years. Marc Bolland, the group chief executive who took the helm in 2010, must be a very happy man to be able to finally unveil a 0.7 per cent rise in same-floorspace sales in general merchandise, which also includes homewares and footwear.

Several times during his tenure M&S’s recovery has stuttered, just propped up in the City’s estimation by a consistently strong performance from its food arm.

But for the first time Bolland can show that the clothing hub of the retailing bellwether seems to be firing on all cylinders, and without sacrificing profit margins in a mad dash for “promotion”-led sales. M&S says margins are up and are going to rise farther.

In addition, the online gremlins that badly affected M&S’s trading in its key Christmas trading quarter have been rectified, with the internet business returning to near-14 per cent sales growth. That’s a good sign in this digital age.

There remain come currency and geo-political headwinds in the likes of Russia, Ukraine and Turkey, and a weak euro has also not helped the group’s international arm.

But it would be carping not to recognise when, after much criticism (including sometimes from this column), a significant recovery milestone has been reached.

Clothing has a talismanic value at M&S. If it is going well, in particular womenswear, M&S will regain the City’s affection.

Despite quite a bit of lukewarm or sniffy publicity, financial markets were already coming around to the idea that change for the better was gradually being achieved by Bolland.

Even before yesterday’s figures – made sweeter when confounding a City consensus expectation that non-food sales would have fallen a further 1.2 per cent – the retailer’s shares had outperformed the broader FTSE index by well over 30 per cent in the past six months. The stock hit seven-year highs at one stage yesterday, and there are more broker ‘buy’ notes around.

Of course, Bolland’s next big challenge is proving the sales rise in the latest quarter to March is more than a flash in the pan. He has to show the general merchandise turnaround has momentum.

But at least M&S looks to be flirting with the idea of being on the front foot again, not just caught in a pincer movement between a high-stepping fashion rival like Next at one end of the market and a gravity-defying Primark clothing business at the cheaper end of the market.

The company’s marketing may have got its snap back, as well, typified by the fashion buzz around the Autograph suede skirt and TV presenter and model, Alexa Chung.

Ofgem’s energy fines helping community

Nobody can accuse energy regulator Ofgem of being asleep currently. Yesterday it ordered utility E.ON to pay £7.75m to Citizens Advice for overcharging customers following price rises in January 2013 and January 2014, as well as incorrectly charging customers exit fees.

Last month Ofgem ordered Scottish Hydro-owning SSE to pay £100,000 to charity for overcharging for generation at six of its plants, shortly after fining it £1.75m for missing deadlines in delivering environmental programmes. Nice to see a regulator plugged in.

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