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Mixed messages from M&S

It seems to have taken a few days for the implications of M&S’s fourth quarter performance to sink in, as City bears have come out in force this morning to take note of what some of the national press described as a “disappointing” set of results for the retailer.

The notes from one particular bearish broker, received this morning, said that M&S’s current share price is “wholly unjustified” and, based on current consumer confidence, their advice is to sell.

Having been on the press call with Marc Bolland and Alan Stewart on Tuesday, I’ve since been mulling what M&S’ set of results really say about the retailer’s recent performance when it comes to womenswear.

M&S made a point of saying it was short of stock on a number of best-selling womenswear lines, an admission which the press, myself included, were quick to jump on.

Bolland blamed an “unusually cold” February but, as one of the other journos on the call pointed out, there isn’t really anything unusual about cold weather in February is there?

Moreover, does any retailer ever hold stock of significant amounts of winter product in February? The window is too tight moving into spring to hold a lot of winter product and the last thing you would want is an “unusually warm” (and that really would be unusual) February, leaving you with lots of surplus chunky knits and winter coats.

If retailers had the ability to predict the weather then surely everyone would be cleaning-up with a merchandising strategy that was always bang-on the money and didn’t involve any element of risk. Unfortunately for Bolland though, no one has developed such a crystal ball as yet, and anyway, that is hardly the point.

The point, which was backed-up by many other high street stalwarts that I spoke to this week, is this. If there was something really “unusual” about a retailer having sold-out of certain lines, then maybe M&S would be justified in blaming it as one of the reasons why its womenswear sales suffered during the quarter but as it is, isn’t it ultimately better that they sold out of items than didn’t shift anything at all?

Bolland also said that the 5% shift from “better” and “best” to “good” product was also to blame for the lacklustre womenswear performance. However, this was not before he had taken the time to mention that the retailer’s top-end or “best” Autograph range was selling particularly well. This begs the somewhat obvious question, why shift from best to good when by your own admission you’ve just said your “best” line continues to be one of the most popular?

Confused? I certainly am but clearly not as confused as this guy who, according to Bolland, is set to be one of this quarter’s best sellers for M&S.

Ruth Faulkner, reporter, Drapers
ruth.faulkner@emap.com

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