M&S facing another fall in clothes sales

Marks & Spencers buying wine with tablet device. Picture: Contributed
Marks & Spencers buying wine with tablet device. Picture: Contributed
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MARKS & Spencer’s clothes-dominated general merchandise business is likely to produce its 12th consecutive fall in underlying sales when the retailer reports its first-quarter figures this week.

Chief executive Marc Bolland has admitted the division’s performance in its last financial year – when like-for-like general merchandise sales fell 1.4 per cent – was “unsatisfactory”.

In part response, the group last week promoted online ­executive director Laura Wade-Gery to take control of its high street stores.

John Stevenson, retail analyst at Peel Hunt, said: “I think we will see more of the same in general merchandise, with a relatively flat sales performance in Q1. It is 12 months since the new M&S fashion ranges started coming through, with high-profile marketing campaigns, but they have yet to gain real sales traction.

“I think the market wants to see the company’s clothing starting to gain market share, like rival Next. The pressure will remain on Bolland while it doesn’t.”

Sam Hart, retail specialist at broker Charles Stanley, said: “I would not expect a meaningful improvement in general merchandise sales this week. Partly this is due to the associated disruption from M&S moving from its Amazon online platform to its own independent platform earlier this year.

“I also think that although there has been a lot of talk about the company’s new fashion ranges there is not a huge amount of evidence that they have been particularly well received by the customers.”

Food is again seen as being M&S’s star turn in the most recent quarter, with the City forecasting a same-floorspace sales increase in the division of 1 to 2 per cent following a 1.7 per cent rise in the last financial year.

“Food will be rock solid as usual for M&S,” one analyst said. “It does what it says on the tin.”

M&S’s trading statement ahead of its annual meeting on Tuesday follows a 4 per cent fall in annual profits to £623 million in May, which cost Bolland his bonus for the first time three years into his planned turnaround programme for the company.

Some in the City saw the shake-up at the 130-year-old retailer as unofficially anointing Wade-Gery as Bolland’s eventual successor. She is the first woman to be at the helm of the group’s retail business.

M&S said its international arm would now be overseen by Patrick Bousquet-Chavanne, alongside his current responsibilities as marketing and business development director.

But one analyst noted: “I don’t think the City sees such changes as particularly significant. We have seen so many come and go at M&S under Bolland in recent years and company-followers are not reading a huge amount into it.”