Marks & Spencer reports clothing sales slump

Thursday 09 January 2014 19.00
M&S says seasonal discounts will hit full year profit margins
M&S says seasonal discounts will hit full year profit margins

Marks & Spencer suffered a tenth successive quarterly like-for-like sales decline in its beleaguered homewares and clothing division today as they slumped by 2.1%.

A 0.5% improvement in the eight weeks to Christmas Eve was not enough to save the beleaguered retailer from the deteriorating overall performance for general merchandise.

The group admitted that a series of discounts to drive seasonal sales - which included a pre-Christmas "Mega Day" with reductions of up to 30% on clothing lines - would hit profit margins when full-year results are reported later this year.

Chief executive Marc Bolland welcomed the improved Christmas performance with sales up in a "highly promotional market".

"However, an exceptionally unseasonal October, which saw general merchandise sales down strongly, has resulted in a quarterly performance below our expectations," he added.

The sales slump was worse than expected and poorer than the previous quarter, when M&S posted a 1.3% decline.

Mr Bolland is likely to face renewed pressure over the performance, coming more than a year after he began a reshuffle of the brand's key fashion executives as the store tried to turn around its fortunes.

Food sales continued to grow, with record sales over the Christmas period and a biggest day ever of sales when £64m of M&S groceries went through the check-outs on December 23.

But the like-for-like improvement of 1.6% over the quarter compared to 3.2% last time meant even this performance showed a slowdown.

Mr Bolland said growth in online sales of 23% was "strongly ahead of the market".

Looking ahead, it said the spring/summer collection had been well received, but warned that it remained cautious about the outlook given continued pressures on disposable incomes.