‘Make or break’ for Bolland as M&S unveils figures

Marks & Spencer chief Marc Bollandis under increasing pressure. Picture: Phil Wilkinson

But the M&S boss may be cut some slack by the City, as most analysts believe that the rate of decline will have slowed notably.

Darren Shirley, retail guru at Shore Capital, said the advertising campaign which began in September for the key autumn/winter clothing collection “has been viewed positively by the fashion press”.

“Womenswear will be the key, because if it is doing well it has a halo effect on the menswear. The fashion media seem to be suggesting there will have been a material slowdown in the loss of market share by M&S.”

However, Shirley, who is forecasting full-year profits at M&S of £687 million against £650m the previous year, said the stock market may have to wait until the Christmas trading update on 9 January to really assess how well the autumn wear has gone down.

“There’s not been a lot of time for the new lines to have been assessed. We will probably need to wait for a clearer picture in January. But it would be nice to get results in general merchandise [which includes clothing] this week that has no shocks,” he said.

M&S, a bellwether for the UK retail sector, has been attempting to revive flagging general merchandise sales, which also include homewares, with a celebrity advertising campaign featuring Dame Helen Mirren and Olympic boxer Nicola Adams.

Analysts believe the campaign may have slowed the sales decline in the three months to September to a consensus forecast of 1.5 per cent.

That would be down on the 1.6 per cent fall in the previous three months to June, when Bolland said the group had  to respond to intense price discounting by rivals.

One analyst said: “The industry buzz is that M&S’s sales decline has slowed, which would be good news.

“Ultimately I think it is make or break time for Bolland. He’s got up to this Christmas to deliver with the autumn/winter selection. If not, the pressure will build big-time.

“Anecdotally, the new ranges seem to have gone down well, but I think there were availability issues in September. In one way that is good, because it means the stuff is flying off the shelves, but bad in that M&S might not have been on top of the supply chain.”

Credit Suisse said in a note that while the new ranges show “some signs of improvement”, they will not be enough to transform underlying sales and pressured profit margins.

Some analysts are also concerned that the relatively mild recent weather might hit the apparel business.

Separately, Bolland risked sparking a row with its general merchandise and clothing suppliers recently by disclosing it is to delay paying them as a cost-cutting exercise.

M&S’s clothing performance is set once again to be outshone by its food business. The supermarket arm is expected to post a 3 per cent jump in underlying sales.