• General merchandise like-for-likes fall 2.7% in fourth quarter
  • Food like-for-likes flat
  • Total group sales up 1.9%
  • New boss Steve Rowe admits GM performance is “unsatisfactory”

M&S’s new boss has admitted its general merchandise performance is “unsatisfactory” as the retailer posted another sales dip for the division.

However, the 2.7% fall in like-for-likes for its clothing and home unit was not as bad as some analysts feared. Total sales in the 13 weeks to March 26 for the division slid 1.9%, as M&S pointed to a “reduced proportion of sales on promotional discount”.

It also flagged a “challenging backdrop characterised by price deflation and a flat market”.

New boss Steve Rowe, who took over this week, said: “Although the sales decline in clothing and home was lower than last quarter, our performance remains unsatisfactory and there is still more we need to do.

“Turning around our clothing and home business by improving our customer offer is our number one priority.”

On a positive note, M&S said it now expects full-year gross margins on general merchandise to be between +240 to +250 basis points.

Rowe revealed this week that he will remain in charge of M&S’s ailing general merchandise division, which he headed up before replacing Marc Bolland as chief executive.

M&S’s food sales also disappointed in the quarter as like-for-likes were flat, while total sales rose 4%. However, Rowe said it “outperformed the market” and boosted its market share to 4.3%.

Online sales in the period rose 8.2%.

Total sales for the group increased 1.9% in the quarter.

Looking ahead, M&S said “currency pressure and challenging trading conditions are still expected to heavily impact” full-year profitability.

Rowe said he will reveal his thoughts on the business when the company reports full-year results on May 25.

 

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