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M&S fashion performs well as group sales rise 4%

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UK retail mainstay Marks & Spencer (M&S) saw total like-for-like (LFL) sales rise 2.8 per cent in its third quarter, according to an interim management statement published today.

Group sales and total UK sales both rose by four per cent year-on-year in the 13 weeks to January 1st, with clothing sales particularly impressive.

Total fashion sales rose 4.7 per cent compared to last year’s Q3 results and Kantar Worldpanel has estimated that in the 12 weeks to November 1st the retailer’s market share of the sector rose by 70 base points to 11.8 per cent.

Marc Bolland, CEO of M&S, said: “Marks & Spencer traded well through the important Christmas period despite the severe weather as customers continued to return to M&S quality.

“We delivered a great Christmas for our customers, from our stylish occasion wear to our innovative festive food.

“I would like to thank all our employees, in particular the store and operations teams, for doing a wonderful job in very difficult conditions to minimise the disruption to our customers.”

Online sales continued to rise in the quarter, growing 25 per cent against 2009, and total international sales also saw a healthy boost of 4.5 per cent.

Sales figures were made to look better because the Q3 period this year lost a lower volume week at the beginning of October which was replaced by the first five days of the post-Christmas period.

With that in mind a rise of 3.8 per cent in general merchandise sales and 1.8 per cent increase in food both on a LFL basis is less impressive but still steady considering December’s snowfall.

M&S estimates that the adverse weather led to a one per cent negative impact in food sales and a three per cent affect on general merchandise which was cancelled out by the changing of dates of the quarter.

In a report published this morning, analysts for Investec Securities David Jeary and Katherine Wynne said they were a little disappointed with general merchandise performance at the retailer, but that its outlook looks strong.

“M&S has reported strong headline numbers flattered by the calendar shift following last year’s 53rd week,” they reported.

“With the step down in the shares since November’s strategy update, we think expectations are relatively low and we continue to believe the company is favourably positioned in 2011 thanks to customer demographics, systems enhancements and pricing flexibility.”

Published on Tuesday 11 January by Editorial Assistant

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