M&S faces clothing sales setback
High street bellwether Marks & Spencer will plead for more time to turn around its struggling clothing business when figures tomorrow are expected to show further deterioration and falling half-year profits.
The chain is set to report its ninth consecutive quarter of falling general merchandise sales - which span clothing and homewares - when it publishes results for the six months to the end of September.
Another fall in general merchandise sales, which analysts expect to decline by 1.5% in its second quarter, would heap more pressure on chief executive Marc Bolland.
The former Morrisons boss has invested heavily in advertising campaigns featuring stars including Dame Helen Mirren and Helena Bonham-Carter to revive clothing sales.
Analysts on average expect M&S to report pre-tax profits of £262 million for the six months, down from £289.5 million a year earlier.
But despite predictions of more glum general merchandise trading, the company's shares have soared over the past year, including a sharp spike in recent weeks.
Bill Adderley, the founder of homewares chain Dunelm, was last week revealed as the owner of a 3% stake, making him the the chain's biggest private investor.
He told the Sunday Telegraph "too big a deal" has been made of its general merchandise problems, adding M&S deserves "top marks" for the performance of its food business.
The retailer is expected to report a 3% gain in underlying food sales during the latest quarter.
M&S's "Leading Ladies" campaign features a dozen high-profile women wearing items from its autumn/winter ranges, including dinner dresses, leather jackets, faux furs and stiletto heels.
But while the new collection began arriving in stores from July, the print, billboard and online campaign was only formally launched at the start of September, and analysts believe it may have a limited impact on second-quarter sales, with mild weather in September also heaping pressure on the ranges.
M&S this week also launched its Christmas advertising campaign, inspired by fairy tales and f eaturing stars including Rosie Huntington-Whiteley, David Gandy and Helena Bonham-Carter.
Another quarterly sales slump for general merchandise would follow a 1.6% fall in its first quarter to the end of June, when M&S said it was battling tough trading and intense discounting.
Analysts at Shore Capital said: "We are nervous about the performance of the UK apparel business despite the high profile launch of the autumn/winter ranges due to the mild weather.
"M&S needs to show underlying market share progress in UK apparel, particularly given favourable comparatives, so providing the basis for the spring/summer offer to build on a stronger platform. Time will tell."
Credit Suisse analysts said while the autumn/winter ranges show "some signs of improvement", they will not be enough to transform underlying sales or margins.