Not even the fashion police can help M&S as share price falls 2.5%

Marc Bolland, the retailer's chief executive, has been wrestling with its fashion business for three years. He insists it's on the brink of success.

by Emma Haslett
Last Updated: 29 Jul 2014

When Marks & Spencer boss Marc Bolland started his job, he gave himself three years to turn the retailer's ailing fashion (or 'fashion', by the looks of some of those frocks) business around. Three years on, and it doesn't look good: in full year results posted this morning, general merchandise - which includes fashion and homewear - grew by precisely zero percent. Zero to one decimal place, in fact. Stripping out the impact of new stores, it dropped by 1.4%.

Time for Bolland to bow out? Unsurprisingly, he thinks not. On this morning's Today programme, he insisted the fashion business was on the brink of success, with favourable reviews for its Autumn/Winter 2014 collection, and a new website which had experienced 'teething problems' but was always going to take six months to settle in (although online sales did rise by almost a quarter during the year, so not all bad). The retailer has re-established its 'quality and style' credentials, he said.

(NB to John Humphrys, who blustered that he didn't 'recognise any' of the women in M&S' 'Leading Ladies' ad campaign: one of them is Roma Agrawal, a structural engineer behind the Shard and one of last year's MT 35 Women Under 35. He can read the shortlist for this year's group here, just in case he wants to bone up in advance of next year's campaign).

The good news was that group sales rose by 2.7% to £10.3bn in the year to March, although underlying profits fell by 3.9% to £623m (that's the third year in a row they've dropped). M&S' food business continued to go down more smoothly than a Belgian chocolate mousse, with like for like sales rising 1.7%. The retailer sold 5.5 million packs of 'party food' over Christmas - that's a lot of sausage rolls.

Shares were down 2.5% in early trading this morning, so clearly M&S shareholders don't have quite the same faith in Bolland as he has in himself. But he's right to point out that Belinda Earl's first collection for the brand was well received. And, lest we forget, in April M&S reported a 0.6% rise in clothing sales. So for investors, it's a matter of watching, waiting and hoping Bolland is right.

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