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M&S sees worst trading since 2008

Marks & Spencer has revealed its worst trading since 2008 this morning, with like-for-like general merchandising down 6.8% over the three months to end-June.

The retailer’s overall like-for-like sales for the first quarter of 2012/13 were down 2.8%, with food the only division stripped out to record growth of 0.6%.

Total UK sales were down 0.9%, with general merchandise down 5.1%.

Speaking this morning, chief executive Marc Bolland acknowledged that the company had lost market share in some parts of the business, although did not state figures.

He insisted it was “not about style,” largely blaming the poor weather for declines, with seasonal items such as casual tops and linen down by up to 30%.

“In some of those areas, we have a market share of up to 30%, so when you have a 30% drop you can see that you would lose market share,” he said.

Ground was made up in other areas –in sales of macs for example, which were up by 25% - however volumes were not enough to offset the total losses.

“Linen is very important for us, therefore it impacts us larger in proportion,” Bolland explained.

Under-stocked items, an issue first raised in the previous quarter, also continued to be a problem. The retailer had sold 105,000 casual jumpers, but could have sold 60,000 more, for example. 

He said the short term trading outlook was “challenging” but stressed the “strong progress” the retailer was making “against our goal of becoming an international, multi-channel retailer”.

M&S saw ahead growth of 14.9% in its multichannel sales, and a climb of 0.9% internationally, with Bolland noting that China and India had been particularly strong. Troubles in the Eurozone did have a negative impact, however.

Bolland also used the results to announce the long-speculated departure of fashion boss Kate Bostock, which will take place this autumn. Her departure sees a restructure of the senior team.



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