M&S to reveal fresh fall in its clothing sales

Marion Dakers
MARKS & SPENCER is this week expected to report a further slide in clothing sales during the first three months of the year, as boss Marc Bolland pins his hopes on the high street stalwart’s autumn collection.

Analysts have forecast a 4.5 per cent fall in like-for-like sales in M&S’s general merchandise arm, showing the firm has deteriorated since a 3.8 per cent slump at the end of 2012.

Shore Capital analyst Clive Black said the update, due on Thursday, could “make for pretty challenging reading for investors”, in spite of Bolland’s pledge to improve sales by the end of the year.

The chief executive last year moved food boss John Dixon into the general merchandise unit and hired former Jaeger and Debenhams executive Belinda Earl as a style adviser.

But the City is not expecting signs of improvement in the business yet. Bolland told the market in January that performance of the general merchandise arm was “not yet satisfactory”, and he is aiming for the autumn and winter collection to mark the turning point.

Analysts at Panmure Gordon are expecting a 3.3 per cent fall in like-for-likes, due in part to the bitterly cold weather at the start of the year keeping customers away and playing havoc with inventories.

However, they believe the new range and the introduction of a new online sales platform will bolster the group over the next 12 months.

Away from the troubled clothing business, food sales are expected to have grown by 2.5 per cent, according to consensus forecasts.

Peel Hunt analyst John Stevenson said in a note that the food division is likely to have enjoyed a boost from a flight to quality sparked by the horsemeat scandal, coupled with an earlier Easter.

Shares in Marks & Spencer, which were lifted by bid rumours last month, lost 4.2 per cent during the four days of trading last week to close at 376.8p.