High street stalwart Marks & Spencer is set to report a drop in earnings on Wednesday, as clothing sales take a hit.
After reporting its first underlying growth in clothing and home sales for nearly two years over the festive Christmas period, analysts have predicted that sales in the sector will have tumbled by more than three per cent in the first quarter.
Marks & Spencer’s food business is also expected to post a more moderate loss of around one per cent, while the consensus for underlying pre-tax profits for the year is down 13 per cent at £593m, according to IG.
Consumer expert Shaun Browne, of advisory firm Houlihan Lokey, placed the problem at the heart of M&S’s offering. “There’s this underlying dichotomy between the huge clothing business and the reasonable food business,” he said. “The clothes aren’t at the premium end of the market, but the food is.”
Perhaps following a similar line of thought, Rowe's turnaround plan has so far entailed the closure of 30 “full-line” shops, which sell clothing, homeware and food, while another 45 are to be converted into food-only stores.
M&S has recently announced two heavyweight hires. Ex-Asda head Archie Norman will join as chair in September, while current Halfords chief executive Jill McDonald will attempt to turn around the group’s ailing clothing business.