M&S thanks its Wise Buys for a revival
MARKS & Spencer, the high street bellwether, yesterday unveiled better-than-expected results which the City took as encouraging signs the worst may be over after 18 tough months for the retailer.
M&S said group sales had lifted by 2.7 per cent in the 13 weeks to 26 September, and while like-for-like sales dipped 0.5 per cent, it was better than the 1.4 per cent drop in the previous quarter.
Kate Bostock, M&S head of fashion and John Dixon, boss of the group’s food division were in good form after managing to turn around falling sales. Sales in clothing jumped by 2.7 per cent during the period and food sales lifted by 1.7 per cent.
Food sales were largely boosted by the group’s introduction of its cheaper own brand “Wise Buys” line, which it said now accounts for 18 per cent of sales.
But the group’s Home division, which has suffered a slump in demand during the property downturn, still suffered a 1.8 per cent drop in sales.
Executive chairman Sir Stuart Rose yesterday said consumers had “more visibility about the outlook”, but cautioned it was “going to be a slow recovery – not spend, spend, spend and a quick bounce back.”
Rose is expected to step down next year as chief executive after a successor has been named and then will stay on as chairman for a year while “the new chief executive gets saddled up”. He is expected to leave the group in 2011.
Dixon was recently promoted to the executive board, in a move many observers believe is a sign Rose wants his former assistant as his successor, and not widely-tipped internal candidate finance director Ian Dyson.
But shareholders have voiced their preference for an external candidate – believing neither have sufficient experience at the helm of such a heavyweight retailer.
Rose tried to shrug off questions yesterday about the Labour and the Tories’ battle for power, but made a number of explicit warnings to the government about making sure “businesses aren’t demonised”.
Rose has recently lashed out at the government’s plans to reintroduce VATat 17.5 per cent during the busy Christmas shopping period.