Marks & Spencer said clothing sales grew 4.2% in the year to April 2 and that it made market share gains across all of its fashion categories.
Clothing market share increased by 50 basis points to 11.7% in the 52 weeks to April 17, according to data from Kantar Worldpanel. M&S’s online clothing market share was 5.6% during the period and it also grew its market leading share in schoolwear to 16.4%.
However, gross margins at the retailer were impacted by 40 basis points due to commodity price inflation, adverse currency impacts and the higher cost of markdowns. M&S said it would work with its supply chain to offset future input price inflation. It added that it had maintained opening price points “wherever possible” and was committed to its good, better, best price points.
Profits up 13%
Group sales at the retailer in the year to April 2 rose 4.2% to hit £9.7bn. Underlying profit before tax soared 13% to £714.3m. UK like-for-likes rose 2.9% and international sales jumped 6.1% to £1bn. Multichannel sales were up 31% in the year, with site traffic up 18% to over 3 million visits per week.
Total general merchandise sales, which includes clothing as well as home, grew by 3.9% in the year, representing a 3.2% rise on a like-for-likes basis. The retailer added that it had a good start to the new financial year.
The retailer said clothing had performed strongly because it had offered its customers “more choice than ever before” during the year.
Dresses performed “strongly” over the period, as M&S provided a broader range of options. It also added that products using fabric innovation such as its Nearly Naked lingerie range and water repellent Stormwear suits performed well. Some 25% of lingerie sales were attributed to new or technlogically innovative products, while 35% of M&S suits featured added technology.
M&S said it met its customers’ desire to trade up, demonstrated by strong sales of its good, better and best offers, such as cashmere sweaters and Autograph boots.
It added that its value staples drove footfall and that it had experienced record sales in hosiery and sleepwear.
Store navigation improvements
M&S conceded that its stores are “difficult to shop” and will begin a process of segmenting them by criteria including affluence and age in October. The stores will “reflect a new space template to ensure the most efficient space allocation and layout for each store, meaning that stores of the same size will no longer necessarily carry the same catalogue,” M&S said.
‘Clarity’ of sub-brands
New in-store signage and refreshed packaging and labelling will also be trialled to enhance the clarity of its sub-brands. M&S’s store modernisation programme will be completed over the next three years and will include a “unique look and feel” for all the sub-brands. Details will follow in September, the retailer said, with the opening of its store in Stratford.
M&S said that it would introduce “brand identities” to deliver its message that it offers a “comprehensive range of the best quality basics on the high street”. Dubbed M&S Woman and M&S Man the identities will be “more modern and desirable and deliver more style credibility to the core M&S range”, it said. The branding will kick off in the autumn.
The retailer said: “Our sub-brands are real assets but customers told us that we need to develop these sub-brands giving them more distinctive values, turning them from labels to real brands.”
It has used criteria such as demographics and affluence to develop “target groups, brand values and colours”.
It added that it had made “good progress” with the recruitment of brand directors and brand managers to work with the buying teams to apply the newly-defined values.
By exiting the Portfolio sub-brand and “transitioning the range” to the core M&S brand, the retailer has provided more clarity, it said.
The retailer said the outlook remained “challenging” due to pressures on disposable incomes and high commodity prices.
Chief executive Marc Bolland said: “In November we set out our plan to grow M&S into a truly international, multi-channel retailer. We have made good progress and are focused on both trading the business in the short temr and on delivering against our long term targets.”