Wednesday, February 20, 2019

General merchandise slumps again at M&S


General merchandise sales at Marks and Spencer have fallen for the 11th quarter in a row.

Food sales were flat while clothing inched up 0.6 per cent on a like-for-like basis off the back of an expensive womenswear marketing campaign. The results brought an end to a long period of decline in the clothing business.

Marc Bolland, Chief Executive said he was encouraged by the performance of womenswear but M&S “remained cautious “about the general outlook.

Total sales fell 0.2 per cent l-f-l in the UK while group sales rose 1.9 per cent as international outstripped its UK performance.

It was no April Fool when M&S said it would be opening 250 new stores over the next three years in Western Europe as well as India, China, Russia and the Middle East. Despite flat food sales in the UK, the company maintain that its food division is in global demand.

The retailer, which made £458m profit in 2013, has ploughed millions into an ad campaign which features a diverse range of influential women such as Tracey Emin, Doreen Lawrence and Emma Thompson showcasing items from its latest fashion collection.

Despite a high-profile glitch in the retailer‘s new website which customers threatened to boycott and shop at rivals John Lewis and Debenhams it maintained the website had delivered a “good performance.”

Heavy promotions in clothing and shoes, which triggered the fastest fall in prices since late 2006 in British shops last month, has affected M&S. It now expects its full year UK gross margin to be down 20 basis points.

James McGregor, director of retail consultants, Retail Remedy said its international expansion plans was its “best hope.”

“Only by creating a standalone clothing brand would M&S stand a chance of attracting the younger end of the market who are shopping with brands like Zara, House of Fraser and Next,” he said. “Relative to these other brands, it has lost a phenomenal amount of ground.”


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