Discounts weigh on M&S despite rise in clothing

Kasmira Jefford
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MARKS & Spencer’s revamped womenswear collection, which has been fronted by stars including Dame Helen Mirren, showed signs of recovery in the fourth quarter despite overall general merchandise sales falling for an 11th consecutive quarter.

The high street giant yesterday split clothing sales from other non-food sales for the first time, revealing a 0.6 per cent rise in like-for-like sales during the 13 weeks to 29 March.

Chief executive Marc Bolland said this marked its best clothing performance in three years, with more shoppers buying into its new fashion lines that have been backed by its star-studded advertising campaigns.

“There is more [being] sold in better and best [priced clothing],” he said. “We have always said we want to improve on quality and style and people are buying more into newness in the store and that is an important indicator.”

Homeware dragged overall like-for-like general merchandise sales down 0.6 per cent, which the group blamed on the late timing of Easter and reduced marketing as it shifted to its new online platform. This compared with a 2.1 per cent decline in the third quarter and the 0.5-1.5 per cent decline predicted by analysts.

Despite the improvement M&S shares fell as it warned that it now expects its UK gross margin for the year to be down around 20 basis points from flat previously because of lower prices in “a highly promotional market”.

Analysts are forecasting full-year pre-tax profits of around £615m-£620m, down seven per cent on last year and less than rival fashion group Next’s profits for the first time.

Like-for-like food sales, which rose 0.1 per cent, were slower due to the late timing of Easter.

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