High street stalwart Marks & Spencer reported an 8.9 per cent drop in clothing sales in the first quarter of its financial year, as the retailer cut back prices and promotions in the build-up to the Brexit referendum.
Clothing and home sales were down by 8.3 per cent with like-for-like sales down by 8.9 per cent in a weak market for the three months to July 2 this year.
Commentators have said this is M&S’ worst performance in a decade, although chief executive Steve Rowe – who was appointed to the role just three months ago – indicated the summer sale period started on July 5, two weeks later than last year. He also remained upbeat about the department store’s path to recovery.
“We knew our actions would reduce total sales but we are seeing some encouraging early signs,” he said.
“As highlighted in May, consumer confidence weakened in the run up to the EU referendum.
“While it is too early to quantify the implications of Brexit, we are confident that our strategic priorities and the actions we are taking remain the right ones to deliver results for our customers and our business.”
While M&S food sales rose by four per cent, like-for-like sales were down 0.9 per cent – of which 0.5 per cent was due to an early Easter.
In addition, total UK sales declined by 1.1 per cent, but the like-for-like figure dipped 4.3 per cent.
Finally, M&S reported group sales for the 13 weeks to July 2 was down 0.4 per cent, or 0.9 per cent at constant currency, while international sales were up 0.7 per cent at constant currency.
When Rowe took over as head of the company he pledged to breathe life back into M&S‘s clothes department, which has faced stiff competition from other high street chains such as Primark and Next.
Nick Gray, managing director at retail marketing specialists Live and Breathe, said M&S needed to ignore the board and the City as they focus “heavily on short term performance” and take comfort in the fact the British public want the company to succeed.
“Steve Rowe accepted a poisoned chalice when he took on the role of CEO – particularly regarding its clothing range, as highlighted by the loss of £200m in clothing sales in the last three years,” Gray said.
“But as M&S shares its first quarter profits under new leadership, Mr Rowe should take comfort in the fact that he has the British public behind him – 81 per cent of shoppers want to see Marks & Spencer survive on the high street – a massive vote of confidence.
“Marks & Spencer needs to ignore the board, ignore the City – which focuses heavily on short term performance – and needs to show us all that it‘s in it for the long haul. It needs to develop long term strategies for its offering – especially within fashion, which it has one last chance to get right. My advice would be to bring that back to brilliant basics with a smattering of fashion options.”
However, Retail Economics cheif executive Richard Lim said M&S’s first quarter results were “disappointing”.
“The iconic British brand suffered from an unseasonably wet and cold spring which has led to one of the toughest trading periods for clothing retailers since the financial crisis,” he said.
“M&S‘s clothing figures are painfully weak and fail to stem the loss of market share to other more agile multichannel competitors. Its tireless efforts to revive the struggling clothing business have failed to resonate with its core customer base.
“The only brighter spot for the company is the food busin