Marks & Spencer sales slip as clothing continues to stall

Marks & Spencer sales slip as clothing continues to stall

Meanwhile, food like-for-likes stayed flat in the first quarter, showing a marginal 0.1 per cent dip.

Clothing sales of £852.1m were down by 1.2% LFL, while food sales were down by 0.1% LFL but up by 4.5% in total. He also argued that the overall United Kingdom clothing market was more promotional than a year ago, which is hurting M&S, however he seemed confident that like-for-like clothing sales should move into positive territory later this year.

M&S previously said it plans to reduce space devoting to clothing and home products by about 1% to 2% in the current financial year and increase food space by around 7%.

Part of the fall came as it opened Simply Food stores near existing shops, which impacted some sales, while the group also cut back on promotions.

Food revenue increased 4.5%. Fellow clothing retailers Next plc (LON:NXT) and Debenhams plc (LON:DEB) have both warned of market volatility as consumers feel the pinch of rising inflation and week wage growth.




Liberum was also upbeat, saying it expects the company's restructuring will eventually bear fruit. "We believe this will continue to put pressure on profitability".

Chief executive Steve Rowe said trading in the first quarter was "in line with expectations" and the company is "on track with delivery of the plan announced last year". Analysts are blaming the fact that Rowe's plan means that there is no clearance sale at M&S these days, which is hitting sales, also some are questioning whether his plan is not only too expensive, but it doesn't go far enough since he is only planning to close 53 stores nationwide. In line with our strategy, full price sales were up c.7%, as we reduced the number of promotions and there was no clearance sale in the quarter compared with one previous year.

There was a need for "stronger promotions", he said, adding that the performance of stores was also being affected by expansion as new M&S food outlets sprung up on their doorstep.

The immediate market reaction has been to sell M&S shares on the back of this news, and the share price continues to linger below the 20-day moving average, which is a bearish sign. "The unexpected drop in sales for their sturdy food division could also be one of the catalysts that has got traders spooked".

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