Britain's top clothing retailer Marks & Spencer reported today its seventh consecutive quarter of falling sales, but said food sales were improving in a tough trading environment.
Chief executive Stuart Rose, brought in last year to fend off a hostile bid approach from retail tycoon Philip Green, said there were signs of recovery but would not call a turn in the fortunes of the tarnished retail icon.
"I don't want to say that, it's too early because we are in a very volatile and still very difficult market.
But I am encouraged by some of the signs that we're seeing," Mr Rose told a conference call.
Like-for-like sales fell by 5.4 per cent in the 14 weeks to July 9th, M&S said, following on from a 5.1 per cent same-store decline for the 2004/5 financial year.
Total clothing sales fell by 9.2 per cent, while like-for-like general retail turnover was down by 11.2 per cent, it said.
The same-store sales fall was at the low end of market expectations, and there was some good news for shareholders as they gather for the company's annual general meeting in Birmingham, central England.
Mr Rose said his cost and margin targets remain unchanged as the company carries 40 per cent less stock into its summer sale that starts on Thursday - meaning a greater proportion of sales are being made at full price.
Unlike many of its British retail peers, M&S has also been able to delay the start of its sale by 18 days compared with last year, another sign of a healthier stock position.
And following a high-profile TV marketing campaign, M&S food sales reversed their sagging trend in the first quarter. Total food sales rose 5 per cent, with the like-for-like figure up 0.7 per cent.
Mr Rose has introduced a range of measures in a bid to turn around the tarnished retail icon, including a wholesale renegotiation of supplier contracts, an overhaul of the company's pricing structure and improved stock control.
But the retail environment has been against him, with five increases in interest rates last year, mounting consumer debt and a weaker housing market contributing to a mounting sense of gloom in high streets and shopping malls.