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M&S: Menswear and lingerie sustain clothing sales

UPDATE: Marks & Spencer said that UK like-for-like sales of general merchandise, which includes clothing, nudged up just 0.7% over the 13 weeks to April 2 but that clothing market share had motored by 30 basis points to 11.6%.

M&S said that menswear and lingerie had performed particularly strongly over the period and that general merchandise performance was in line with expectations against strong comparatives of 9.1% like-for-like growth in the same quarter last year.

Performance in womenswear during the period was flat although chief executive Marc Bolland said it was against strong comparisons the previous year. “It is, I would say, a good performance but it’s flat,” he said.

Bolland said that M&S had not yet appointed any of the dedicated brand managers revealed as a major plank of M&S clothing strategy last November, in order to develop support and marketing strategies for individual sub-brands.

The retailer also said that average value per item sold was up 6% in the period, largely as a result of customers trading up.

Bolland said: “It doesn’t mean that we have raised the prices, it means that the consumer buys more expensive items. We do see VAT rises and a small increase in inflation but the major difference [driving up the average value per item sold is customers trading up] is the major move from good to better and from better to best.

“People are buying different garments at different prices. They don’t pay 6% for the same item; they pay the same price for lots of items but one or two items they are buying differently.

“If average sales price goes up, 2.5% of this is coming from the impact of increased VAT, the remainder, which is 3.5%, comes from the change in mix. A shirt that has a selling price of £29 versus a shirt that has a selling price of £19, then the average sales price is up for us, so the avergage sales price has changed because the mix has changed.

“We have kept our opening price the same for things like men’s polo shirts where the product costs £12 and we have sold 400,000 in the first quarter and Blue Harbour as a brand is up by 4% but on our Blue Harbour luxury range, we are up more than 50% so people traded-up when they saw we bought in more style and more luxury.”

M&S also said it had enjoyed a good start to its new womenswear spring campaign with customers responding well to its interpretation of spring 11 trends. Bolland said items featured in the campaign were performing particularly strongly, including product which includes innovations such as its stormwear” range of water repellent menswear, and its “Insolia” comfort high heeled shoes.

Total general merchandise sales in the UK rose by 1.2% on an underlying basis, when the first five days of Christmas Sale were stripped out to provide a closer comparative trading period to the previous year.

This increase in general merchandise sales is ahead of some predictions, with broker Morgan Stanley having forecast earlier this week that M&S would report a 7% decline in general merchandise like-for-like sales in the UK.

International sales were up 12.6% which M&S said reflected strong performance across most markets, offset by difficult trading conditions in Ireland and Greece.

Sales from the retailer’s online business M&S Direct were up 13.7% in the quarter as it reached the anniversary of its Shop Your Way, multi-channel ordering service, which allows customers to order in-store, online, via mobile web or by phone.

Looking ahead, M&S said it expected trading conditions in the current financial year to be increasingly challenging as a result of increasing pressure on consumers disposable incomes and rising commodity prices. It said it was cautious about the outlook and would focus on remaining competitive in terms of pricing and value.

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