M&S reports slowing decline of clothing sales

M&S reports slowing decline of clothing sales

Marks & Spencer has reported a smaller drop in its struggling non-food sales division for the first quarter of 2017.

Clothing and home sales are down 1.2% to £852.1m on a like-for-like basis for the 13 weeks to 1 July, compared to being down 5.8% in the final quarter of 2016.

Food sales are down 0.1% on a like-for-like basis to £1.41bn.

The company’s total UK revenue is down 0.5% on a like-for-like basis to £2.26bn, while group revenue is £2.53bn. The company has been boosted by 3.8% growth in its international business to £272.3m in revenue.

Steve Rowe, chief executive of M&S, said it was continuing to grow full-price sales in clothing and home and had reduced discounting and clearing sales during the quarter.

He added: "Trading in the first quarter was in line with our expectations and we are on track with delivery of the plan we announced last year."

Rowe’s turnaround plan for M&S has including hiring former Halfords chief executive Jill McDonald to take charge of the non-food business. The retailer recorded growth in its clothing business for the first time in two years in January.

In May the retailer also announced it would begin a "soft trial" of online grocery delivery this autumn.

M&S also shook up its marketing activity last summer by splitting with 16-year incumbent ad agency Y&R London and hiring WPP stablemate Grey London as its ad agency. 

However, Paul Thomas, senior consultant at Retail Remedy, warned that this year’s exceptionally late Easter had clouded M&S’ performance this quarter.

He said: "There is no doubt it is better than their Q4, but not yet worthy of a ‘turn of fortunes’ headline we feel. Steve Rowe, in his statement, puts emphasis on increasing full price sales, not so hard to do when you push clearance activity back by a week.

"Our concern is declining like for like sales do not deliver increased profit with only an improved gross margin. We would rather have heard about focus on delivering fashion that the customer wants to shop or increased transactions through the till."


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