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Top marks for Primark, but for M&S it’s ‘must try harder’

In a slightly cruel coincidence of the financial reporting calendar, Marks & Spencer’s latest interim update on Wednesday came out two days after Primark’s full-year statement.

As part of parent company Associated British Foods’ report, we learnt that the value champion “had another magnificent year, increasing profit by 30% at constant currency and adding a net 1.2 million sq ft of selling space taking our total estate to over 10 million sq ft”.

A successful entry into France means Primark is operating in nine markets and I am pretty confident it will make a success of the US when it opens its first store in Boston late Next year. You can bet the Dublin-based Primark will play up its “old country” connections for the locals in this staunchly Irish city and it will be a great springboard for the other nine stores it has promised to open in the northeast states by the end of 2016.

Comparisons between Primark and M&S are inevitable and older readers will not need reminding that Marks has not had a happy record Stateside. It bought American menswear chain Brooks Brothers in 1988 for $750m and sold it in 2001 for just $225m. Its adventure with New Jersey-based grocery chain King’s was also a failure. Having bought it for the equivalent of £66m in 1988, it finally disposed of it in 2006 for just £35m.

Careful, not to say selective, reporting of the past six months’ financial performance at M&S was the order of the day at Wednesday’s press briefing. Chief executive Marc Bolland tip-toed through the numbers to tell us that sales in the essential womenswear sector had grown by all of 1.3% in the five months to the end of August. But when warm September was also added to the mix, sales had actually dropped by about 0.9%. The Dutchman steadfastly declined requests for information on sales of menswear and kidswear, which suggests to even the most generous observer that they were not positive (click here for our view of M&S menswear this season).

Credit where credit’s due, M&S has improved its margins by rationalising its supply chain and controlling costs, but this development, while welcome, still cannot disguise the impression that the business is still drifting rather than steaming ahead.

Most astonishing is the admission that its online sales actually dropped back by 6% in the first half of the financial year. This cannot possibly be the result M&S wanted or expected when it switched from an Amazon platform to its own in February. How clever of Primark not to bother with a transactional website!

Despite the regular knocking of the once-mighty Marks, let’s not forget that the company was a clear winner of the Consumer Choice section of last year’s Drapers Awards, which was decided via an online poll conducted on our behalf by an independent research agency. Its customers do seem fanatically loyal - there are just fewer of them.

And on the subject of the Drapers Awards this year, the Drapers community needs to know that the silent auction for the event is now open. The beneficiary will be the Fashion & Textile Children’s Trust (FTCT), that fine charity which issues grants to children whose parents work in virtually any sector of our industry. There are about 40 fabulous prizes on offer and you DO NOT have to be attending the black-tie dinner in London on November 20 to bid and hopefully win. Go to Drapersawards.auction-bid.org/micro2.php to register, see all the prizes and make a bid or three. Good luck!

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