M&S Sees Clothing Sales Fall As Food Goes Up

Retailer Marks and Spencer has reported a drop of 3.8% in like-for-like clothing sales for the first three months of the year, as food sales rose 4%.

It was the seventh consecutive quarterly fall in underlying general merchandise sales, though the outcome was a touch ahead of expectations.

M&S, which has been the subject of takeover speculation, said sales of its non-food products, spanning clothing, footwear and homewares, at stores open over a year dropped in the 13 weeks to March 30.

As a result of the boost by food, total group sales in the period rose by 3.1%.

The 129-year-old retailer, which serves 21 million customers a week from over 700 domestic stores, had to again rely on its strong food division to support overall growth.

Chief executive Marc Bolland is under pressure to recover M&S's clothing performance after a poor 2012 culminated in a disappointing Christmas.

However, he has cautioned that a new general merchandise management team led by John Dixon, the former boss of food, will not make a major impact on sales until M&S launches its autumn/winter collections in July.

Total UK like-for-like sales rose 0.6%.

"The fourth quarter wasn't as bad as some had expected," James McGregor, director of the retail consultants, Retail Remedy, said.

"General Merchandise is clearly still struggling but these numbers will buy Marc Bolland a few more months. Judgement Day for Marc Bolland will come later this year."

"We are working hard on improving our performance in general merchandise and, despite difficult trading conditions, we made progress in our operational execution," Mr Bolland said.

"In January we said we expect the pressure on consumers' disposable incomes to continue throughout 2013. As a result we were cautious about the outlook for the year ahead and this view remains unchanged."

The M&S share price was up more than 3% in early Thursday trading.

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