Marks & Spencer unveiled a positive Christmas trading period yesterday when the retail stalwart romped to the first quarterly rise in its key clothing and homeware sales in nearly two years.
Group chief executive Steve Rowe, who took the helm last April, revealed that the division’s like-for-like sales lifted 2.3 per cent in the 13 weeks to the end of December – the first growth since the opening three months of 2015.
Some of the actions we take in the short term will result in negative periodsSteve Rowe
“We saw full-price increases in every single clothing division,” Rowe said, adding that it was the first time M&S had gained market share in the full-price clothing market in seven years.
Adding to the cheer, M&S’s food arm saw sales up 0.6 per cent. Rowe said that the good Christmas was fuelled by “better ranges, better availability and better prices”.
The retailer’s shares at one stage climbed 6 per cent on the headline numbers, but later closed up 1.3 per cent at 344.9p as the City noted that the latest trading period was boosted by five extra trading days compared with the same period last year.
Retail analysts also cited a relatively cautious outlook statement from Rowe, who has launched a turnaround of the high street icon after taking over from Marc Bolland, involving both store closures and conversions into food-only outlets.
He stressed that there there was more work to do in turning clothing sales around and suggested this quarter may not mark a return to sustained clothing and homewares sales growth.
The group is set to suffer a hit to fourth-quarter figures due to the timing of sales as well as a later Easter this year. Rowe said: “We intend to grow the business. It will take time for the consumer to notice that. Some of the actions we take in the short term will result in negative periods.”
The M&S boss has pledged to win back a core customer base he has referred to as “Mrs M&S” – its loyal army of women aged over 50 – by revamping its clothing offer, cutting everyday prices for nearly a third of its ranges, and increasing staff numbers on the shop floor.
He said yesterday that so far he had been pleased with the customer response, while the group had also successfully slashed the number of clearance sales. He did not echo the clothing sector gloom of his counterpart at Next last week, Lord Wolfson.
Rowe said consumer confidence was fragile but “fairly stable”, although he confirmed fears of a long-term trend for “people to buy less clothing”.
M&S announced plans in November to close about 30 UK stores and convert 45 more into food-only shops, while also announcing a retreat from a raft of international markets.
Kate Calvert, retail analyst at Investec, said it was “too early to call a victory” in its clothing sales fightback.
“With a slowdown in consumer spending expected in the year ahead, we believe this could well go negative again,” she added.