M&S warns of difficult trading as clothing sales slide
Retail giant Marks & Spencer has revealed a steeper drop in sales in its embattled clothing division after shunning discounts and seeing shopper demand hit by poor weather.
The high street chain, which has 10 stores selling food and clothing in Northern Ireland, said like-for-like sales in its general merchandise arm, which includes womenswear, fell 1.9% in its second quarter, following a 0.4% drop in the previous three months.
The chain also has eight Simply Food stores around the province.
But its move not to join in widespread discounting on the high street helped boost underlying pre-tax profits by a better-than-expected 6.1% to £284m in the six months to September 26. On a statutory basis, profits were 22.7% lower at £216m.
M&S added that its new Sparks loyalty card had been "extremely successful", with 1.8 million customers signing up since its launch two weeks ago.
The group was also helped by another decent performance in its food division, with like-for-like sales ahead by 0.2% in its second quarter, although this marked a slight drop on the 0.3% in the previous three months.
Shares lifted 4% as the City cheered the group's forecast-beating hike in half-year profits.
M&S boss Marc Bolland said the group delivered "good underlying profit growth" and insisted the chain's decision not to run discounts was the right move, despite leading to a worsening sales performance in clothing, homewares and shoes.
The group said trading conditions on the high street were tough as firms slashed prices to shift stock after being hit by unseasonal conditions over the summer.
Mr Bolland said: "We took the decision to focus on profitability and full-price sales."
M&S has also been making efforts to cut sourcing costs in the general merchandise business, which is helping push up profits.
A robust hike in online sales also helped the group in its first half, with M&S.com seeing sales surge by 34.2%. But this failed to offset a hefty slide in comparable sales in its UK stores, down by 5% to 6% in the half year, according to the group. Total interim UK like-for-like sales were left 0.4% lower as a result, while international sales were hit by the strong pound, down 2.4% in the second quarter. M&S cautioned that trading will remain difficult.