Marks & Spencer executive chairman Sir Stuart Rose has a lot to be cheerful about this morning. Just a month before he hands over the reins to Marc Bolland, M&S has reported that like-for-like sales grew 5.1% last quarter - thrashing analysts’ predictions of a more modest 1.7% rise. This was largely thanks to a 10% rise in clothing sales, although customers were also snapping up home goods (which notched up a 13.3% increase on the previous quarter). Admittedly, the 13-week period helpfully included the first day of the Christmas sale. But nonetheless, Rose will be pleased to hand on the baton safe in the knowledge that M&S is heading in the right direction. And after a difficult couple of years, it won’t do his legacy any harm either.
Today’s figures suggest that both divisions of M&S are recovering pretty well. The general merchandise department (which proved more resilient in the recession) was up 9.1%, as customers snapped up formalwear and knitwear. Meanwhile, the food department notched up its second consecutive quarter of growth, with sales up a healthy 1.8%. But the real star of the show was online shopping division M&S direct, where sales were up a hefty 48%. And Rose won’t be the only one feeling chipper today – the company’s 78,000 staff will share out an £80m bonus pot. Lucky them.
However, it wasn’t all good news. We Brits might be snapping up M&S Y-fronts and shortbread in the UK, but the same can’t be said for customers overseas: international sales fell almost 6%. M&S blamed this on difficult trading conditions in key foreign markets, including the likes of Ireland and Greece, and on weak exchange rates (thanks to the fall in the value of the pound).
But by and large, Sir Stuart had a positive story to tell in what will be his final results statement at the helm (although he will still be lurking in the shadows as non-exec chairman for another year or so, while Bolland gets up to speed). After being feted as a retail genius when he propelled M&S to record profits a few years ago, Rose’s halo has slipped slightly as a result of the retailer’s recent struggles. But we reckon he’s still going to be a tough act to follow. Let’s hope Bolland’s up to the job.
And although he may be contemplating retirement, Rose shows no sign of fading into the background. After getting embroiled in the row over the Government’s proposed NI hike, by signing the letter of opposition sent to the Telegraph, Rose took issue this morning with the Prime Minister’s claim that the signatories had been ‘deceived’ by the Tories. ‘This is an important argument and to insult the collective intelligence of 60-plus chief executives is unhelpful,’ Rose growled on the Today programme. Quite right – although this row won’t do his chances of a peerage any good if Labour get back in...
In today's bulletin:
Bank of England holds interest rates as economic data perks up
BA seals Iberia tie-up - as Unite returns to negotiating table
Rose goes out with a bang as M&S beats forecasts with 5% hike
Reckitt boss Becht cleans up with £90m annual pay packet
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