British retailer Marks & Spencer posted an eighth consecutive quarterly fall in underlying sales of general merchandise, though the outcome did represent a slowing in the rate of decline.
The performance will ratchet up the pressure on management to deliver a swift turnaround when new season ranges start hitting the shops later this month.
The 129-year-old group, which serves 21 million customers a week from 766 British stores, said sales of non-food products, spanning clothing, footwear and homewares, at stores open over a year fell 1.6 per cent in the 13 weeks to June 29th, its fiscal first quarter.
That compared with a decline of 3.8 per cent in the fourth quarter of the group’s 2012-13 financial year.
“In general merchandise we have seen some improvement, despite difficult trading conditions and further intensification of promotional activity in the market,” M&S said.
Marc Bolland, chief executive since 2010, is pinning his hopes on a new clothing strategy based on more stylish and higher-quality garments.
Autumn/winter ranges were unveiled in May by his new general merchandise team, led by John Dixon, the former boss of M&S food, receiving generally positive reviews from both analysts and the fashion press, and sending M&S shares, which have also been buoyed by periodic bouts of bid speculation, to a five-year high.
M&S’s food business, which contributes over half of group sales, is performing much better. Its sales on the same basis rose 1.8 per cent versus analyst forecasts of a rise of 1.0 per cent to 2.0 per cent.
The food business is benefiting from product innovation, a focus on providing for special occasions and M&S’s avoidance of any involvement in a scandal over foods found to contain horsemeat when they were labelled as containing other meats.
“Given the challenging trading conditions, we remain cautious about the outlook and continue to manage the business tightly,” M&S said.
Reuters
