So here we are again. Marks & Spencer has put out another set of dismal results, marking the 17th quarter of clothing sales declines out of 18 at what is the nation’s defining retailer.
The story was similar to so many that we’ve heard before: general merchandise was a disappointment (although admittedly, the 2.7 per cent drop in like-for-likes was not as terrible as had been expected) and food was the singular bright spot (albeit slightly worse than expected).
Sales at M&S.com grew 8.2 per cent, which would be impressive if the business wasn’t trailing embarrassingly behind its peers. At this stage, it should be commanding double-digit growth at a minimum.
So why, then, was M&S’ share price up throughout the day, closing three per cent higher at 432.90p? It would seem that much shareholder exuberance is down to Steve Rowe, Croydon-shop-boy-turned-chief executive, who – we are hoping – will draw a line under the Marc Bolland era. But are investors right to be optimistic?
Rowe gave little away that you couldn’t have predicted. He wants more investment in clothing, acknowledging that M&S is (still) not getting it right. He also alluded to product quality – the same area that Bolland pledged to improve three years ago – admitting that the customer offer must up its game. Other than that, it was small beer, with just a promise of a more detailed update in May. The company’s idiosyncratic AGM is now the date we look to for signs of change.
As someone who has worked at the coalface, we can hope that Rowe will tackle the issues at the root: staff morale, stores and clothing are matters of urgency. But he is a lifer, one who has defended Bolland in the past, and one who – let us not forget – is currently in charge of the basket case general merchandise arm.
Can he really be the person to do what is needed and give M&S a good kitchen-sinking?
He will need to, and what’s more he will need to offer pretty quick signs of improvement if those shareholders that backed him yesterday are to remain loyal.
Anyone who has heard Bolland intone his “step-by-step approach” ad nauseam for the past few years will now want action, not words.