Green shoots for Marks & Spencer and Bonmarché

Friday, 11 April 2014

Thursday all eyes were on Marks & Spencer, as the British retailer released its last quarterly results. The womenswear overhaul carried out by the high street champion is paying off already as the better-than-expected figures caught market by surprise.

Despite the boost, most analysts still expect Marks & Spencer's pre-tax profits to fall 6 percent to 623 million pounds when annual results are published on 20 May, reported BBC. In this regard, Neil Saunders, managing director of retail analysts Conlumino, said the trading update showed Marks & Spencer was showing "some green shoots of recovery in its non-food division".

"Although the numbers are not spectacular, and they are set against some soft comparatives, they have at least brought to an end a long run period of decline in the clothing business," Columino added.

Marks & Spencer's clothing sales have begun to recover, it has said, but sales across its wider non-food division fell for the 11th quarter in a row.

Still in London, Bonmarché issued a trading update for the 13 and 52 week periods to 29 March 2014, revealing like-for-like sales increased by 13.5 percent for the 13 week period, bringing the figure for the year to 10.4 per cent.

Chief executive Beth Butterwick said: "I am delighted with our performance, particularly with this being our first year end as a listed company. The growth driven though product, stores and multi-channel initiatives, demonstrates our customers' positive reaction to our strategy.

Meanwhile, in Tokio, Fast Retailing Co cut its full-year operating profit forecast as sales at domestic stores of its Uniqlo casual wear brand fell below expectations, outweighing brisk growth in China and elsewhere abroad.

Fast Retailing's reliance on Uniqlo Japan for sales declined to 53 percent of revenue in the first half, down nearly 10 percentage points on year, but Japan's cost-conscious shoppers are depressing margins, published Reuters.

Consequently, Fast Retailing also cut Uniqlo Japan's profit outlook for the full year by 12.7 percent, reflecting a lower than expected result for its recent strategy of offering luxurious items such as cashmere sweaters that still fit a lower-cost bracket.

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