Clothing and homeware sales at Marks & Spencer fell by 2.9% on a like-for-like basis for the 53 weeks to April 2, compared to the year before, as the retailer “underperformed the market and lost market share”.
M&S blamed “challenging trading conditions” due to unseasonal weather, particularly in the autumn, which led to high levels of promotion. Total sales in the general merchandise division were down 2.2%.
Across the business, including the food division, sales were up 2.4% to £10.6bn. Underlying profit before tax was up 4.3% to £689.6m, however, profit before tax fell 18.5% to £488.8m and M&S warned its turnaround plan could further dent profits in the short term.
M&S clothing has seen like-for-like sales decline in all but one of the last 18 quarters.
New chief executive Steve Rowe said the clothing performance was “unsatisfactory” and outlined his initial turnaround plans.
Going forward M&S wants to “re-establish its style authority” by focusing on product, quality and fit, it is going to lower prices and reduce its promotions. It is also going to sharpen ranges, improve availability and invest in store staffing.
As previously reported by Drapers, initial changes to M&S’s management structure, board responsibilities and buying strategy under Rowe were largely welcomed as a good “first step” towards reviving its flagging fashion division.
The retailer said the customer is at the heart of its new strategy, which will enable speedier decision making and a “more confident and coherent” fashion offer.
Rowe revealed a new, slimmed down management structure earlier this month – resulting in the departure of a number of senior staff. The autumn 16 range, which will be merchandised by outfit rather than brand, was well received by the fashion press.
M&S is also establishing a new operating committee, which will be accountable for the day-to-day running of the business, as well as for the development and execution of strategy.
Rowe said: “We are clear on the actions needed to recover and grow clothing and home, which is our top priority. We are investing to re-establish our price position by sharpening prices and to enhance service by putting more employees into our stores.
“These actions, combined with the difficult trading conditions, will have an adverse effect on profit in the short term. We are, however, confident that our commitment to delivering the right product, price and service will help return clothing and home sales to growth. This, together with continued momentum in food, will provide us with a solid base from which to build a long term sustainable business.”