Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Concern mounts over M&S turnaround strategy despite fashion sales increase

Marks & Spencer reported a much-needed rise in clothing sales during the fourth quarter, but rivals and analysts cautioned that there is still a long way to go in its turnaround strategy.

In the 13 weeks to March 29, sales from clothing, which M&S stripped out from the wider general merchandise category for the first time, rose 1.3%, with like-for-likes up 0.6%.

But retailers told Drapers that against weak comparatives - temperatures were unseasonably cold at the same time last year - and their own high, double-digit sales growth during the same period, the rise was not impressive.

“We’re up 45% on last year in womenswear,” said the boss of one high street retailer, while another questioned the validity of the sales rise. “General merchandise is made up of beauty, which is tiny and not growing, and home, which is small, so fashion dominates the category. If clothing is up by only 0.6%, and the wider general merchandise category is down as a whole, I question how well lingerie, accessories or footwear, for example, are doing.”

During the quarter, general merchandise sales rose just 0.2%, while like-for-likes fell 0.6%.

“It’s all in the profit figures, and profits have fallen for five years. It is giving stuff away at the cost of margin,” another retailer told Drapers, referring to M&S’s discounting strategy over the past 12 months. “Online is its only chance to shine, but when you go on the website you see 20%-off offers on product that is full price in stores. What’s that about?”

But chief executive Marc Bolland insisted the clothing sales rise is encouraging. “The 0.6% increase is a starting point for the next quarter, it’s a step-by-step approach,” he told Drapers. Alan Stewart, chief finance officer, added that M&S is “behind the market” in the number of promotions it offers.

Bolland said the M&S Collection range performed well, highlighting dresses and holidaywear as strong categories, and adding: “We sold 2,500 of the floral lace dress that Alek Wek wears in the Leading Ladies campaign in just one week.”

Maureen Hinton, retail analyst at Conlumino, said better ranges and merchandising had contributed to the clothing growth, but added that so had regular promotions and weak comparatives: “There is lots more to do still and [sales from] home should have been better considering the housing market growth.”

M&S is now giving guidance that gross margins for general merchandise in the second half will be down “as a result of a highly promotional market”. Food will offset this slightly, but in total UK gross margin is likely to be down 20 basis points.

Group sales rose 1.9%, with UK total sales up 1.5%, while like-for-likes fell 0.2%. Much of this was driven by food, which rose 2.5% and 0.1% respectively. M&S.com was up 12.5% in the period, and international sales rose 4.7%.

The company will report its full-year results on May 20.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.