Further drop predicted in M&S clothing sales

Monday, 04 November 2013
Analysts predicted that Marks & Spencer will reveal a further drop in general merchandise sales tomorrow when the department store releases its half-year financial results. Chief executive officer Marc Bolland launched a three-year plan back in 2010, with hopes of turning around Marks & Spencer’s declining general merchandise sales and rebuilding its image as an "international, multi-channel retailer.” However, not a single retail analyst in London is predicting a rise in Marks & Spencer's apparel sales. The consensus of analysts foresee a 1.5 percent drop in clothing sales and anticipate pre-tax profits of 262 million pounds for the six months to the end of September, which is a 9.5 percent drop from last years results. Analysts at Credit Suisse believe that autumn/winter collection, which was introduced to stores end of July, may show ‘some signs of improvement’, but it will not be sufficient to boost clothing sales enough. Recent clothing sales have also been affected by the unseasonal warm weather experienced from the middle of September to October, with many fashion retailers like John Lewis, Topshop and Matalan revealing a dip in winter apparel sales.

M&S witness ninth successive quarter of falling clothing sales

This continual drop from Marks & Spencer’s in clothing sales comes after a series of attempts to bring new life to its apparel sales, such as the introduction of a new fashion team, more pronounced and high-profile clothing lines (Best of British) as well as the star studded ‘Britain’s Leading Ladies’ campaign for the women's wear Autumn/Winter collections. But it seems to be that Marks & Spencer’s hard work has yet to pay off and a further decline in clothing sales would make this the ninth consecutive quarter of falling apparel sales.

In spite of lagging fashion sales, Marks & Spencer’s booming food sales provide a sharp contrast with its declining general merchandising sales. The department stores food sales are predicted to show a 2.5 to 3 percent growth in tomorrow's results, according to analysts at HSBC. In a recent press release concerning food sales, Bolland said: “Our Food business has gone from strength to strength under our plans to transform M&S. We’ve delivered 15 quarters of like-for-like growth in the UK and have opened Food stores in cities like Amsterdam and Paris.” Bolland also revealed plans to open another 150 Simply Food outlets throughout the UK within the next 3 years, with new stores opening in the next year in locations such as Evesham, Woodley in Reading and Leigh in Greater Manchester.

So while clothing sales continue to drop, food sales continue to do well and currently account for 55 percent of Marks & Spencer's total sales, with an opportunity to grow with the addition of new Simply food stores.

Photos: Marks & Spencer, Marks & Spencer's leading ladies campaign.

 

Related News