M&S stems fashion decline as full-price sales spike

The high-street stalwart said clothing and home sales fell 1.2% on a like-for-like basis in the 13 weeks to July 1 and inched down 0.5% on a total basis to £852.1m.

Full-price sales in clothing and home jumped 7% as M&S pressed ahead with its strategy to reduce the number of items sold on promotion.

Indeed, the retailer held no clearance Sale during the quarter, compared with one last year.

The figures mark an improvement from Marks & Spencer’s year to April 1, when like-for-like sales in clothing and home fell 3.4%, following a sharp 5.9% decline during its fourth quarter.

M&S said food sales remained broadly flat during its first quarter, dipping 0.1% on a like-for-like basis.

On a total basis, food sales jumped 4.5% to £1.4bn.

That drove its total UK sales up 2.6% to £2.26bn during the 13-week period.

M&S admitted that the later fall of Easter had a positive impact on its figures, estimating that it increased revenue growth in home and clothing by approximately 0.6% and food by circa 0.7%.

Group sales advanced 2.7% to £2.53bn following a £272.3m contribution from its international operations – a 3.8% improvement year on year.

However, on a constant currency basis, international sales were down 4% after M&S closed 28 of the 53 stores in the markets it is exiting, as the retailer revealed last November.

‘On track’

M&S boss Steve Rowe said: “Trading in the first quarter was in line with our expectations and we are on track with delivery of the plan we announced last year.

“I am pleased that we continue to grow full-price sales in clothing and home, with reduced discounting and no clearance Sale in the quarter.

“In our food business, we delivered strong growth from new Simply Food openings, and are prioritising better ranging and stronger promotions.”

AGM

M&S, which said its full-year guidance remains unchanged following today’s update, will come under further scrutiny from investors at its AGM later today.

Shareholders are expected to raise concerns over M&S’ advertising with the Daily Mail, after more than 60,000 people penned petitions urging the retailer to cease advertising in the newspaper.

An open letter from 60 migrant solidarity and anti-racist groups has urged M&S to pull its advertising from the newspaper after claiming the publication fuels racist and xenophobic violence in the UK.

Meanwhile, Strathclyde Pension Fund and other large City investors have written to M&S ahead of today’s meeting at Wembley Stadium, calling on the business to become an accredited Living Wage employer.

The institutional investor claims the move would have “significant benefits for investment portfolios, companies, and workers’ livelihoods”.

Richard Keery, investment manager at Strathclyde Pension Fund, said: “There is a clear business and moral case for a FTSE 100 company such as Marks & Spencer to pay a Living Wage.

“For investors such as ourselves, accreditation with the Living Wage Foundation sends a clear signal that a company values its employees and is focusing on the long-term success of the business through investment in staff.

“We would be very encouraged indeed to see M&S progress towards Living Wage accreditation.”