Clothing sales at Marks & Spencer slumped by 8.9% on a like-for-like basis, the retailer has revealed in its Q1 2016 trading update. The performance is worse than many analysts’ predictions which placed the expected drop at around 6%.
In the 13 weeks to 2 July Marks & Spencer clothing and home sales were down a total of 8.3% and 8.9% on a like-for-like basis. Despite this CEO Steve Rowe insisted there were some “encouraging early signs” of the long-awaited recovery in its clothing business.
M&S cut promotional activity during the period in question and its sale was started two weeks later than usual, which will have accounted in part for the unflattering like-for-like comparison. “A key part of our recovery plan for Clothing & Home is lowering prices and reducing promotions. As a result, we ran fewer price promotions while continuing to lower prices to deliver real value to our customers, and moved the summer sale to July,” Rowe said. “We knew our actions would reduce total sales but we are seeing some encouraging early signs.”
A drop in consumer confidence prior to the Brexit referendum at the end of June was also a factor, Rowe added, but he said it was too early to predict the long-term outcome of the leave vote. “While it is too early to quantify the implications of Brexit, we are confident that our strategic priorities and the actions we are taking remain the right ones to deliver results for our customers and our business,” he said.
Unforgivingly wet weather in the first quarter will not have helped matters either though this was not cited as a factor in the retailer’s official statement. Furthermore earlier this month Kantar Worldpanel revealed earlier this month that clothing sales had dropped for the first time in six years by 0.9%, so M&S will not be the only retailer to suffer the effects.
All in all Rowe, who said upon his ascension to the CEO position earlier this year (replacing Marc Bolland) that restoring growth to clothing was his number one priority, has had an extremely tough set of trading conditions to contend with.
Total group sales were up 1.3% in the quarter and total food sales (M&S’s strong suit) were up 4%, however on a like-for-like basis food sales were down 0.9%.