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M&S clothing sales suffer spring falls M&S clothing sales suffer spring falls
(35 minutes later)
Marks & Spencer’s clothing sales resumed their downward slide this spring despite a better performance from its online business.Marks & Spencer’s clothing sales resumed their downward slide this spring despite a better performance from its online business.
The sales decline is a blow for the chief executive, Marc Bolland, after M&S delivered its first rise in clothing sales in four years in the previous quarter.The sales decline is a blow for the chief executive, Marc Bolland, after M&S delivered its first rise in clothing sales in four years in the previous quarter.
Bolland said M&S had been forced to offer more discounts than last year in a “challenging and promotional” quarter in the three months to 13 June. Cool weather in May affected the whole high street, which put up the sale banners earlier than usual in June.Bolland said M&S had been forced to offer more discounts than last year in a “challenging and promotional” quarter in the three months to 13 June. Cool weather in May affected the whole high street, which put up the sale banners earlier than usual in June.
Bolland said: “It’s hard to say we are disappointed in a very difficult quarter to still have level sales ... In a difficult market in a more difficult quarter we have done very well, we are holding up strongly.”Bolland said: “It’s hard to say we are disappointed in a very difficult quarter to still have level sales ... In a difficult market in a more difficult quarter we have done very well, we are holding up strongly.”
Related: Marc Bolland at M&S: the story so farRelated: Marc Bolland at M&S: the story so far
The quarter’s 0.4% fall in underlying sales of general merchandise, which also includes homewares, was not as bad as the 1% decline predicted by analysts.The quarter’s 0.4% fall in underlying sales of general merchandise, which also includes homewares, was not as bad as the 1% decline predicted by analysts.
Bolland admitted the sales numbers would be “completely different” if it wasn’t for a turnaround in trading at the retailer’s website where sales rose 38.7%.Bolland admitted the sales numbers would be “completely different” if it wasn’t for a turnaround in trading at the retailer’s website where sales rose 38.7%.
The City will also be relieved as M&S insisted it was on track to deliver promised improvements in profit margins as a result of more efficient buying practices.The City will also be relieved as M&S insisted it was on track to deliver promised improvements in profit margins as a result of more efficient buying practices.
Bolland said M&S was focused on improving profit margins - by 1.5% to 2% this year - and he could not promise that clothing and homewares sales would return to positive territory in the next quarter. Bolland said M&S was focused on improving profit margins – by 1.5% to 2% this year – and he could not promise that clothing and homewares sales would return to positive territory in the next quarter.
“We will see some quarters which are slightly down and some that are slightly up. That’s how we are trading this business,” he said. But Bolland insisted that shoppers’ perception of the style and quality of M&S’s clothing had improved. “We will see some quarters which are slightly down and some that are slightly up. That’s how we are trading this business,” he said.
However, Bolland insisted that shoppers’ perception of the style and quality of M&S’s clothing had improved.
M&S’s food sales continued to increase, helping the retailer improve its market share in a tough environment where supermarkets are embroiled in a price war.M&S’s food sales continued to increase, helping the retailer improve its market share in a tough environment where supermarkets are embroiled in a price war.
Underlying sales of food rose 0.3% in the quarter to 13 June – in line with expectations – as the retailer introduced 700 new product lines. Total food sales rose 3.2% as the company opened more of its Simply Food convenience stores. Bolland said M&S was on track to open 90 new stores this year.Underlying sales of food rose 0.3% in the quarter to 13 June – in line with expectations – as the retailer introduced 700 new product lines. Total food sales rose 3.2% as the company opened more of its Simply Food convenience stores. Bolland said M&S was on track to open 90 new stores this year.
With the business on track, Bolland said M&S would launch a promised £150m share buy-back on Wednesday. Bolland said M&S would launch a promised £150m share buy-back on Wednesday.
The strong food performance, share buyback and better than expected clothing sales in the face of a chilly spring will give Bolland a boost as he faces a potential shareholder revolt at M&S’s annual shareholder meeting in Wembley on Tuesday. The strong food performance, share buyback and better than expected clothing sales in the face of a chilly spring will give Bolland a boost as he faces a potential shareholder revolt at M&S’s annual shareholder meeting at Wembley on Tuesday.
M&S is under fire for offering Bolland the chance to earn up to three times his salary in long-term share awards based on performance measures that are not linked to financial targets.M&S is under fire for offering Bolland the chance to earn up to three times his salary in long-term share awards based on performance measures that are not linked to financial targets.
Shareholder advisory group Pirc is also concerned about a new executive share option plan that allows for awards to be accelerated in the event of a takeover or when an executive leaves the business. It recommended shareholders to vote against both schemes.Shareholder advisory group Pirc is also concerned about a new executive share option plan that allows for awards to be accelerated in the event of a takeover or when an executive leaves the business. It recommended shareholders to vote against both schemes.
This year M&S’s senior executives got bonuses for the first time in two years after an improvement in performance at the retailer. This year, M&S’s senior executives received bonuses for the first time in two years after an improvement in performance at the retailer.
All bonuses were cancelled in 2014 after M&S reported its third straight year of falling profits. The decision affected all 80,000 staff, from Bolland to workers manning the tills and changing rooms. All bonuses were cancelled in 2014 after M&S reported its third straight year of falling profits. The decision affected all 80,000 staff, from Bolland to staff working the tills and changing rooms.
But after the retailer posted its first increase in profits for four years, Bolland was awarded a bonus worth £596,000, taking his total pay package to £2.1m. M&S employees will also get a cash reward, although the retailer does not disclose details of the staff bonus pot. however, after the retailer posted its first rise in profits for four years, Bolland was awarded a bonus worth £596,000, taking his total pay package to £2.1m. M&S employees will also get a cash reward, although the retailer does not disclose details of the bonus pot.
Low-pay campaigners ShareAction and Citizens UK are set to urge M&S to pay its staff at least the living wage – £9.15 an hour in London and £7.85 across the rest of the UK.Low-pay campaigners ShareAction and Citizens UK are set to urge M&S to pay its staff at least the living wage – £9.15 an hour in London and £7.85 across the rest of the UK.
The retailer’s board will be presented with handkerchiefs embroidered by activists from the Craftivist Collective at a series of “stitch-ins” at M&S branches across the UK. The group said it wanted to “encourage the company not to ‘blow’ their chance to support life-changing decisions”. The retailer’s board will be presented with handkerchiefs embroidered by activists from the Craftivist Collective at a series of “stitch-ins” at M&S branches across the UK. The group said it wanted to “encourage the company not to blow their chance to support life-changing decisions”.