M&S sees clothes sales rise but Bolland still cautious
A glimmer of hope for high street store Marks & Spencer.
The retailer’s reported that clothing sales rose 1.3 per cent in the first part of 2014, up 0.6 per cent like-for-like.
General merchandise saw group sales up a modest 0.2 per cent in the 13 weeks to the end of March, but still declining from a year earlier, down by 0.6 per cent.
Group sales were up 1.9 per cent in the period.
The results mark the 11th straight quarter of declines in general merchandise. M&S doesn’t usually split clothing from general, but is “obviously trying to draw out the positive”, commented Stephen Springham of Planet Retail, speaking on Radio 4’s Today programme.
Springham’s said the results offer a “crumb of comfort”, buying pressured chief executive Marc Bolland some more time.
The store says its womenswear offering is picking up, leading the way in clothing. It’s been spending out on heavy promotion and has continued to cut prices.
Bolland said the firm’s expecting full year gross margin in food to be “slightly ahead of previous guidance”, but the second half general merchandise gross margin to be down, in line with the first half of the year.
Therefore, it expect the full year UK gross margin to be lower by around 0.2 percentage points. When it comes to outlook, Bolland says:
Despite some improvement in consumer confidence, we remain cautious about the outlook. Our focus is on continuing to transform Marks & Spencer into an international, multi-channel retailer.
The store’s focusing closely on its priority markets of India, China and the Gulf, all of which have seen strong growth, it says.
M&S will report its full year results on 20 May.