The high street stalwart today revealed that despite food sales rising 4% in the first quarter compared with a year ago, it only managed a measly 0.6% group growth for the same period. Of course, with the double-edged clothes/food business model that M&S is famous for, this can only mean one thing: clothing sales are still bombing. New director of style, Belinda Earl, has got her work cut out.
The general merchandising portion of the business showed a sharp drop in sales, down 3.8%, driven mainly by racks of unsold clothes. The firm has been trying to revitalise its clothing brand for the last few years, but a slew of initiatives has so far failed to get punters enthusiastic.
Chief executive, Marc Bolland, said: ‘We are working hard on improving our performance in general merchandise, and despite difficult trading conditions, we made progress in our operational execution.’ Unfortunately he’s starting to sound like a broken record, having said something very similar In January when the Christmas results were disappointing.
So where can Sparks go from here? Well, Bolland, with his lengthy experience at Heineken and Morrisons (so food’s alright) has made a couple of good moves. He’s hired former Debenhams and Jaeger big shot Belinda Earl, Victoria Secret’s Janie Schaffer as head of lingerie, and his right hand man, John Dixon, (previously head of the food business) has plans to get more online sales, refurbish every store, and open more overseas outlets.
A lot rests on Earl here. When the KPIs show that clothing is the spanner in the works, improving its fortunes is a buck that stops with her. Somewhat mystifyingly, shares rose by more than 4% on Thursday morning, although nice little phrases like ‘our biggest ever Easter week’ and ‘unaffected by the recent issues affecting the food industry’ obviously bolster confidence in the food business.
Whether or not Earl can turn things round will not be known until 2013’s Autumn line of clothing has had its outing. This will be the real test – until then, M&S’s shareholders will just have to sit tight and wait.