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M&S to reveal results of efforts to boost clothing sales

Published 01/04/2016

Marks & Spencer will reveal whether efforts to boost its women's clothing division have helped boost falling sales
Marks & Spencer will reveal whether efforts to boost its women's clothing division have helped boost falling sales

The City will next week expect an update from Marks & Spencer on whether it has improved its clothing sales, and it will want to hear if menswear retailer Moss Bros has managed another hike in profits.

Marks & Spencer will reveal whether efforts to boost its women's clothing division have stemmed falling sales when it updates the market on Thursday.

The high street giant saw like-for-like sales in its general merchandise arm - including clothing - fall 5.8% in the 13 weeks to December 26, as it felt the force of unusually mild weather and poor stock availability.

The third quarter update came as chief executive Marc Bolland revealed he would be bowing out from the business following a dire Christmas performance, with M&S veteran Steve Rowe stepping up to the helm.

The retailer moved to strengthen its clothing division in February when it announced a tie-up with TV presenter Alexa Chung, who will launch a fashion collection inspired by M&S's extensive archives.

The 31-piece womenswear collection will be called Archive by Alexa and was due to launch in selected stores and online this month.

Share Centre analyst Graham Spooner said the group has been sharpening its focus on increasing profit margins across general merchandise - especially women's clothing - in a bid to strengthen its financial performance.

He said the food business " should continue to show steady progress" and the market will also be looking closely at how online sales are performing.

He added: "Some analysts are concerned about the potential impact of a 'Brexit' vote in June on the retail sector, so any comments about that from M&S will also be of interest."

The third quarter fall in like-for-like sales came as the group resisted pressure to discount early despite widespread sales launched on the high street.

It also suffered a shortage of lighter-weight clothing as shoppers shunned thick winter coats.

But it hailed its ''best ever Christmas'' for the food division, with a 0.4% rise in like-for-like sales over the quarter to December 26 against challenging conditions in the sector.

Mr Bolland, who took on the post of chief executive in early 2010, is set to retire at the end of the group's financial year on April 2, but will remain on hand to help with the handover until the end of June.

Meanwhile, menswear specialist Moss Bros is expected to cheer a further rise in profits when it reports full-year results on Tuesday, after taking steps to bolster its top team.

The retailer looks set to boost annual pre-tax profits to £5.8 million, up from £4.8 million, with turnover reaching £123.1 million, according to company consensus figures.

It comes after the firm said at the beginning of the year that like-for-like sales had risen by 4.2% in the 23 weeks to January 9, compared to last year.

Analysts have also b een encouraged about the future potential of Moss Bros after it revealed two industry heavy weights would join the firm to help drive future growth.

The business said in February that Tony Bennett had been appointed as group finance director, taking over from Robin Piggott who is retiring from the firm.

Mr Bennett - who will take up the role in mid-August - is currently the finance director at menswear retailer Charles Tyrwhitt. He was previously head of commercial finance at department store Selfridges.

He will join Paul Minowa, who has taken up the role of chief operating officer following a strong career in retail at Asda, Boots, Ann Summers and German lifestyle retailer Strauss Innovation.

Analysts at Liberum said the appointments signal "intent to establish a business primed for growth".

The company said in its January trading update that r etail sales - which make up 86% of the firm's revenues - were benefiting from its store refit strategy and improvement to brands.

It said h ire sales also increased by 9.5% like-for-like, as the evening wear maintained the momentum seen in the first half of the year.

Moss Bros has staged a recovery in recent years, with chief executive Brian Brick revamping ranges and stores since taking over in 2009, after the group made a series of losses.

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