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Marks & Spencer clothing sales rise for first time in four years Marks & Spencer clothing sales rise for first time in four years
(about 1 hour later)
Marks & Spencer has delivered its first rise in clothing sales in four years after a pickup in performance at its website.Marks & Spencer has delivered its first rise in clothing sales in four years after a pickup in performance at its website.
Sales of clothing and homewares at established stores rose by 0.7% in the 13 weeks to 28 March compared with a 5.8% slide in the previous three months.Sales of clothing and homewares at established stores rose by 0.7% in the 13 weeks to 28 March compared with a 5.8% slide in the previous three months.
The tentative step into growth, ahead of analyst expectations, comes after 16 quarters without growth. It was also achieved in the face of a tricky spring for fashion retailers with much chillier weather than this time last year. The tentative step into positive territory, ahead of analyst expectations, comes after 16 quarters without growth. It was also achieved in the face of a tricky spring for fashion retailers, with much chillier weather than this time last year.
M&S credited improvements in style and quality as well as positive press coverage, particularly of a suede skirt which has yet to arrive in stores, for the sales turnaround. But performance was largely lifted by a return to growth at M&S.com, where sales rose 13.8%, a considerable bounce from the 6% slump over Christmas, when business was affected by problems at the group’s hi-tech distribution centre in Castle Donington. M&S credited improvements in style and quality as well as positive press coverage, particularly of a suede skirt which has yet to arrive in stores, for the sales turnaround. But performance was largely lifted by a return to growth at M&S.com, where sales rose 13.8%, a considerable bounce from the 6% slump over Christmas, when business was affected by problems at the group’s distribution centre in Castle Donington.
Marc Bolland, chief executive, said that sales of womenswear, menswear, childrenswear and home furnishings had all increased as shoppers perceived an improvement in style and quality at the chain. He said M&S’s top-priced brand Autograph and The Limited, its most fashionable label, had both enjoyed underlying growth of close to 10%. The chief executive, Marc Bolland, said sales of womenswear, menswear, childrenswear and home furnishings had all increased as shoppers perceived an improvement in style and quality at the chain. He said M&S’s top-priced brand Autograph, and The Limited, its most fashionable label, had both enjoyed underlying growth of close to 10%.
Related: This season's cult item: The Autograph suede skirt He said: “People are looking for quality and style and we’re benefiting from that. Our spring/summer collection has done very well. Customers have reacted very positively to it and it’s been bang on trend.”
“People are looking for quality and style and we’re benefiting from that,” he said. “Our spring summer collection has done very well. Customers have reacted very positively to it and it’s been bang on trend.” Food sales rose 3.7% in total or 0.7% once the impact of new store openings was stripped out, a good performance in a tough market in which a price war is affecting all the major supermarkets. The company said it had enjoyed record Valentine’s Day sales.
Food sales rose 3.7% in total and 0.7% once the impact of new store openings was stripped out, a good performance in a tough market in which a price war is affecting all the major supermarkets. The company said it had enjoyed record Valentine’s Day sales.
Shares in the retailer leapt 6% to 561p in early trading as some analysts said they were preparing to upgrade annual profit forecasts in the light of the better sales, tighter controls on costs and an on-target rise in profit margins.Shares in the retailer leapt 6% to 561p in early trading as some analysts said they were preparing to upgrade annual profit forecasts in the light of the better sales, tighter controls on costs and an on-target rise in profit margins.
Bolland refused to mark the quarter as a definitive turn in M&S’s fortunes. “I am not going to step away from my step-by-step story ... This is another step in the right direction,” he said. Bolland, who has been under increasing pressure to demonstrate signs of a recovery in M&S’s fashion fortunes, refused to mark the quarter as a definitive about-turn. He said: “I am not going to step away from my step-by-step story ... This is another step in the right direction.”
And he reiterated his commitment to the group. “I really enjoy my role. I have enjoyed the past few years and there is still more to do,” he said. He reiterated his commitment to the group, saying: “I really enjoy my role. I have enjoyed the past few years and there is still more to do.”
The Dutchman has been under increasing pressure to demonstrate progress in clothing sales since he brought in former Debenhams boss Belinda Earl to work with John Dixon, the M&S ‘lifer’ who was put in charge of clothing and homewares two and a half years ago after reviving the fortunes of the group’s food division. Bolland joined M&S from Morrisons, the supermarket chain, in 2010 and has invested heavily in revamping stores as well as trying to modernise the group’s IT systems and distribution set-up since then. Related: This season's cult item: The Autograph suede skirt
Analysts welcomed Thursday’s update as the first sign of success for Bolland’s strategy for non-food. The Dutchman brought in the former Debenhams boss Belinda Earl to work with John Dixon, the M&S “lifer” who was put in charge of clothing and homewares two-and-a-half years ago. Dixon had previously revived the fortunes of the group’s food division. Bolland joined M&S from Morrisons, the supermarket chain, in 2010, and has since invested heavily in revamping stores as well as trying to modernise the group’s outdated IT systems and distribution setup.
But David Jeary at Canaccord Genuity warned: “Just as one swallow does not a summer make, one quarter of positive like-for-like does not a trend make.” Analysts welcomed Thursday’s update as the first sign of success for Bolland’s strategy for the non-food business.
They were also concerned about performance overseas, a key plank of Bolland’s revival plans for M&S. Sales fell 3.8% as the retailer’s franchise operators suffered from political and economic problems in Russia, Ukraine and Turkey. M&S said those issues had “significantly impacted” profits from outside the UK. However, David Jeary at Canaccord Genuity warned: “Just as one swallow does not a summer make, one quarter of positive like-for-like does not a trend make.”
Tony Shiret, the veteran retail analyst at BESI, said that like-for-like clothing sales in M&S’s stores were still likely to be falling by as much as 2% because the topline was boosted by online sales. He also suggested that M&S had been able boost trade with discounts under-pinned by a new ways of cutting deals with suppliers which was helping to boost profit margins. “We do not believe that today is a key opinion changing day for M&S,” he wrote in a note. They were also concerned about performance overseas, a key plank of Bolland’s revival plans for M&S. Sales fell 3.8% as the retailer’s franchise operators suffered from the political and economic problems in Russia, Ukraine and Turkey. M&S said those issues had “significantly impacted” profits from outside the UK.
Bolland insisted that clothing sales were “flat” rather than falling in stores. “Predominantly growth has come from online but like-for-like sales are strong compared to others,” he said. Tony Shiret, the veteran retail analyst at BESI, said like-for-like clothing sales in M&S’s stores were still likely to be falling by as much as 2% because the top line was boosted by online sales. He also suggested that M&S had been able to boost trade with discounts underpinned by new ways of cutting deals with suppliers which were helping to boost profit margins. “We do not believe that today is a key opinion-changing day for M&S,” he wrote in a note.
Bolland insisted clothing sales were “flat” rather than falling in stores. He said: “Predominantly, growth has come from online but like-for-like sales are strong compared to others.”