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Retail: M&S confirms 12th consecutive quarter of falling general merchandise sales

PUBLISHED: 09:29 08 July 2014

Marks and Spencer today announced a 12th quarter in a row of declining sales for its clothing and homewares division.

Marks and Spencer today announced a 12th quarter in a row of declining sales for its clothing and homewares division.

PA Wire/Press Association Images

Marks & Spencer boss Marc Bolland blamed website teething problems today as the chain’s homeware and clothing division registered its 12th quarter in a row of declining sales.

The general merchandise arm posted a 1.5% fall in like-for-like sales for the 13 weeks to June 28, making it three straight years of quarterly declines for the division, while food grew like-for-like sales by 1.7%.

The group’s total revenues for the period grew 2.3%, though the business said sales were hampered by teething problems after the introduction of a new website earlier this year.

Chief executive Mr Bolland said: “We have seen a continued improvement in clothing, although as anticipated the settling in of the new M&S.com site has had an impact on sales.”

The figures were announced hours before Mr Bolland and the rest of the board are due to face concerned shareholders at M&S’s AGM at Wembley Stadium.

The business said its online sales were 8.1% lower due to the problems customers have experienced with registration and navigating the site.

Mr Bolland said the firm was simplifying parts of the site, which currently has 3.2 million users, and expects the online business to be back in growth by the retailer’s peak trading period which begins in November. The firm plans to register six million users by the end of the year.

Like-for-like clothing sales were down 0.6%, though total sales edged up 0.1%. Mr Bolland added that its key womenswear range was up “slightly” for the second quarter in a row which meant that the changes the firm put in place last year to refresh its lines were beginning to show through.

Mr Bolland, a former Morrisons boss, said that the company’s food sales continued to “outperform the market”, and it was on track to add another 150 Simply Food stores in the UK over the next three years.

Marks & Spencer said its outlook for the full year remains unchanged, with the City forecasting a 2014-15 pre-tax profit of £663million, up from £623m in 2013-14. But analysts were divided over whether Mr Bolland, who joined the business in 2010, has begun to turn the retailer around.

Edison Investment Research analyst Neil Shah said: “With food continuing to outperform the market, a resurgent clothing offering helping to turn the corner for general merchandise, M&S is on course to deliver one of its better all-round performances for several years with three quarters of the current financial year to play for.”

However, analysts at Shore Capital said: “Overall, we deem this to be another disappointing update from the company, with general merchandising in the UK continuing to weigh heavily upon the group’s growth prospects.”

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