Falling sales hit M&S shares

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Shares in Marks & Spencer fell in early trading this morning following last night’s impromptu trading update from the retail bellwether.

The group was forced into rushing out its Christmas trading statement – which had been due to be published this morning – after some details were leaked.

Non-food sales dropped 3.8 per cent in the 13 weeks to 29 December, pushing overall like-for-like UK sales down 1.8 per cent.

M&S, which has drafted in former Debenhams and Jaeger boss Belinda Earl to revitalise its womenswear, said it had been a “challenging and highly promotional” general merchandise market.

The figures were worse than expected, with most analysts predicting a 1.5 per cent like-for-like decline in general merchandise sales, and shares in M&S were down more than 4 per cent shortly after the market opened.

Chief executive Marc Bolland admitted the group’s general merchandise business was “not yet satisfactory”, but he said he was confident in the steps being taken by the new team, including tighter stock management, with a focus on full price sales.

But Keith Bowman, equity analyst at Hargreaves Lansdown stockbrokers, said M&S “continues to test investors’ faith in its recovery strategy” and the pressure was on Bolland to deliver an improved performance.

He added: “For now, despite the nation’s love for the brand, M&S is yet to truly find its way, with analyst opinion only coming in at a ‘hold’, albeit a strong one.”