First it was Next, then Tesco- now will the downtrend of like-for-like sales decline be hitting the very much loved British retailer, Marks and Spencer?
On Wednesday, Marks and Spencer will be delivering their half year figures. Marc Bolland the CEO of the group who took over Sir Stuart Rose in 2010 could find himself in the firing line as he has continuously struggled to turn around the High Street ever since.
The past 13 quarters has seen sales fall for the company, despite the growing economic recovery.
Further to that, the company is expected to reveal sales of general merchandise including clothes, have fallen by 3.7% in the second quarter of the year. Also shares within the company ended last week at 406.7% having lost 20% of their value since reaching 511% in February earlier this year. Nonetheless food sales for the company have risen by 0.2% during the second quarter.
Andrew Hughes, analyst at UBS, said: “The path to positive like-for-likes in general merchandise may again have been delayed by mild UK weather, which may stretch into November. Next reported -4% sales in September, the most important month – we believe – in M&S’s first half, and October’s recovery was weaker than expected. As well as playing a part in further M&S estimate downgrades, it makes it hard to ascertain what progress is being made at the front end of the business.”
The CEO has said that the key number in this week’s results will not be sales, but margins. He has pledged to increase the margin on the clothing M&S sells by 100 basis points during the year. The company will also be delivering this through improving the efficiency of its supply chain and selling more clothing at full price.
However it seems as though Marks and Spencer is failing to make the most of the growing online market. In recent months customers have complained about continuous problems with the site ever since it relaunched in February. Although Marc Bolland recently insisted that M&S is now ‘fit for the future’ having spent more than £2.3billion on his turnaround strategy. Using this money on the firm’s warehouse network, IT, website and clothing range.
Rival Next revealed last week that profits have been up to £25 million lower due to warm weather hindering high street sales. The M&S group will be issuing interim figures on Wednesday.