M&S clothes sales crash 8.9pc in ‘soggy start’ to the year

The City had been braced for the retailer to post a sales drop in the region of 6 per cent following what some called a “soggy start” to its year, reports The Telegraph.

However, its dramatic 8.3 per cent slide in total clothing and home sales and a 8.9 per cent drop on a like-for-like basis for the 13 weeks to July 2 will leave investors reeling and prompt fresh fears about the health of the British high street.

Marks & Spencer’s food division, which has often outstripped its grocer rivals, has also weakened, with a 0.9 per cent dip in like-for-like sales during the period. Like-for-like sales discount the effect of new stores that have opened during the year.

Total sales were up by 1.3 per cent during the quarter.

Marks & Spencer blamed the heavy tumble in clothing sales on its decision to delay its summer sales until the start of this week, despite many of its rivals choosing to go on promotion earlier to shift summer stock that had proven hard to sell during a wet June.

Steve Rowe, M&S chief executive said: “We ran fewer price promotions while continuing to lower prices to deliver real value to our customers, and moved the summer sale to July.

“We knew our actions would reduce total sales but we are seeing some encouraging early signs. Our food business continues to strongly outperform a deflationary market, with like-for-like sales slightly down when adjusted for Easter timing.

As highlighted in May, consumer confidence weakened in the run up to the EU referendum. 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.”

The retailer said that it was sticking to its full-year profit guidance.

When he took the reins earlier this year, Mr Rowe said that he would make fixing Marks & Spencer’s clothing his “number one” priority and would “cherish Mrs M&S”.

“Steve Rowe could not really have asked for more testing conditions for his first full quarter in charge,” said Peel Hunt analyst Jonathan Pritchard.