Marks & Spencer has reported a 2.8% drop in Clothing & Home sales in the 12 months to 1 April 2017 as it continues to reduce promotions and clearance sales.
The high street retailer said that while overall revenue was down in the Clothing & Home division, full price sales were up 2.7% and gross margin was up 105 basis points. Earlier this week analysts had said they expected a drop of as much as 3.3% in clothing sales.
“As we have made improvements to our Clothing & Home product and proposition, our customers have noticed; we are starting to stabilise market share and importantly have seen full price market share growth, as we removed excessive discounting,” said CEO Steve Rowe.
Group revenue was up 2.2% at just over £10.6bn but profits took a hit due to restructuring at the retailer, which recently revealed the first six of a planned 60 store closures over the next five years. Adjusted pre-tax profits were down 10.3% at £613.8m.
“As we anticipated, the planned restructuring of M&S has come with a cost and has impacted profits, but the business is still strongly cash generative and we reduced our net debt,” Rowe said.
“Looking ahead, we will continue our programme of self-help in a tough trading environment. We remain committed to delivering for our customers and shareholders as we build sustainable foundations for the future,” he added.
The business recently made two significant appointments. Retail veteran and turnaround expert Archie Norman has been appointed chairman to replace Robert Swannell, who stands down in September. Former Halfords CEO Jill McDonald has been appointed as managing director of Clothing, Home & Beauty. She will take up the position in the autumn from Rowe, who has been overseeing the division since his appointment as CEO just over a year ago.
