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M&S loses fashion market share

Marks & Spencer’s market share in the fashion sector has dropped 0.6 percentage points year on year to 9.9% for the 24 weeks to May 10, according to figures from Kantar, as the high street retailer focuses on full-price sales.

Broker Bernstein said the company’s fashion sales declined 2.3% in the period, up from a 3.2% drop during the first quarter of the year but “significantly below” its rivals.

Jamie Merriman, senior analyst at Bernstein, said: “M&S will find it challenging to reduce promotions and improve gross margin while also delivering positive like-for-like sales. Management’s stated objective of gross margin expansion is restricting markdowns and hence volume of sales and top-line growth.”

M&S chief executive Marc Bolland has been concentrating on boosting the retailer’s gross margin, which improved by 190 basis points for the year to March 31 thanks to “significant sourcing gains”, and is expected to increase by a further 150 to 200 basis points in the next 12 months.

Consistent with its strategy, M&S’s average price point relative to the market has risen 4.6 percentage points year on year to a 27% premium.

Among the top 10 retailers in the UK listed by research firm Kantar, M&S lost the biggest share of the key womenswear market, dropping 0.5 percentage points in the period to 10.6%, while value retailer Primark gained the most, with a 0.6 percentage points increase to 5.5%.

M&S also lost the most market share in menswear, dropping 0.6 percentage points to 10.5%. Sports Direct and Next made the biggest gains, rising 0.5 and 0.6 points respectively to 6.2% and 7.5% of the market.

The Kantar data showed the fashion market grew 3.3% over the latest 24-week period, above the five-year average of 1.9%.

Although volume growth was 3.5%, there was a year-on-year price decline of 0.3%.


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