M&S boss Rowe remains cheerful in the face of startling sales plunge

Rowe has spent almost his entire career at M&S
Rowe has spent almost his entire career at M&S

Marks & Spencer chief executive Steve Rowe was stoic in the face of troubling figures today, after like-for-like clothing sales at the retailer plummeted 8.9% in the last three months.

The results, for the 13 weeks to 2 July, painted an apparently grim picture for Rowe, who pledged to get the clothing division back on track when he succeeded Marc Bolland in April.

It is the 19th quarter out of 20 in which clothing sales have fallen – and the drop this time is far sharper than in the last set of results in April, when they were down 2.7%

The food division, the retailer's salvation in recent years, also saw sales fall on a like-for-like basis – though this was partly down to this year’s early Easter, which fell in the previous quarter.

Even taking into account new store openings, it meant UK sales across the whole business fell 1.1% total, and 4.3% like-for-like.

But Rowe was adamant that today’s figures were an inevitable outcome of the changes he has introduced to revive the M&S fashion offering, and said he expects things to improve as those changes take effect.

"A key part of our recovery plan for clothing and home is lowering prices and reducing promotions," Rowe said.

"As a result, we ran fewer price promotions while continuing to lower prices to deliver real value to our customers, and moved the summer sale to July. We knew our actions would reduce total sales but we are seeing some encouraging early signs."

Rowe also blamed the recent political upheaval for a general drop in spending.

"As highlighted in May, consumer confidence weakened in the run up to the EU referendum. While it is too early to quantify the implications of Brexit, we are confident that our strategic priorities and the actions we are taking remain the right ones to deliver results for our customers and our business."

James McGregor, partner at consultancy Retail Remedy, said that pricing strategy could only go so far in turning around the fortunes of the clothing division – instead, Rowe needed to find a way to entice shoppers that would normally only come into the store for food, he said.

"What M&S must now do is disrupt the customer on their journey to the food hall. Take them completely by surprise and be blatant about why they should take a detour to clothing. Price is a significant part of the equation but it is time to look further into the clothing proposition."

M&S is reviewing its integrated advertising and digital business. Only WPP-aligned shops are contesting the account, which came up for review in May. 

Now read Campaign's analysis of the challenge facing Steve Rowe.

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