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New M&S boss Steve Rowe to set out turnaround plan for clothing business

Published 24/05/2016

Steve Rowe pledged to restore the fortunes of Marks & Spencer's general merchandise division
Steve Rowe pledged to restore the fortunes of Marks & Spencer's general merchandise division

Marks & Spencer's new boss Steve Rowe is expected to set out plans to turn around the retailer's beleaguered clothing arm when he reports full-year figures on Wednesday.

Mr Rowe pledged to restore the fortunes of its general merchandise division last month after reporting a 2.7% slide in fourth quarter like-for-like sales days after taking on the top job from Marc Bolland.

He branded the performance as ''unsatisfactory'' and said he would remain in charge of the clothing business because he was ''personally committed'' to getting it right.

He has a task on his hands, however, given the dismal conditions for womenswear retailers in April, with Next recently warning over profits after last month's cold weather.

The firm said the lacklustre figures could indicate a wider slowdown in consumer spending.

But despite the woes at its clothing division, M&S's annual underlying pre-tax profits are expected to edge higher, up 1.8% to £673 million.

This would mark the second annual rise in a row after it halted a run of falling earnings in the previous year.

M&S has been helped by robust performance from its food division, which held like-for-like sales flat in the fourth quarter against tough conditions in the grocery sector amid a supermarket price war.

The chain has also been making efforts to cut sourcing costs in the general merchandise business, which is helping push up profits.

But investors will be keen to hear more on Mr Rowe's plans for the group following his move to cull a raft of senior executives earlier this month.

He announced he will almost halve the number of senior executives from 20 to 11 as part of a management reshuffle.

The group has also recently scored another coup for its clothing business in the fight to revive flagging sales by sealing a tie-up in February with TV presenter Alexa Chung to launch a fashion collection inspired by the company's extensive range.

Peel Hunt analysts said they expect Mr Rowe to give a "pretty candid analysis of what M&S is doing wrong".

They added: "There are too many basic mistakes being made (sleeve lengths wrong, jagged seams) and the fit of some ranges is questionable.

"We think Rowe understands this and will take action on both price and quality."

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