Marks and Spencer blames falling clothing sales on the weather
But analysts blamed "a tendency to compromise on quality and design"
Marks and Spencer said wet weather and its decision to focus on full price sales contributed to falling sales of clothing, shoes and homeware in the summer months.
Like-for-like sales in its general merchandise arm slipped 1.9 per cent in the 13 weeks to September 26, more than the average analyst forecast for a fall of 1.2 per cent and the 0.4 per cent decline it saw in the previous quarter.
But analysts said that Marks and Spencer's core shoppers may have been turned off by "a tendency to compromise on quality and design". "Speculation is rife that [chief executive] Marc Bolland is casting his gaze over potential acquisitions in a bid to revamp its clothing arm, drafting in external brands for the first time ever," said Julie Palmer, Partner at Begbies Traynor, the business recovery and property services consultancy.
Hopes that its non-food business had turned a corner were raised in May, when it said it halted a dismal run of 14 consecutive quarters of falling non-food sales.
It has invested heavily in improving its clothing ranges, hiring new designers to revamp its style and items like a £199 suede skirt helped the store win over customers and fashion editors alike.
Bolland said the decline was due to a strategic decision to improve margins, which rose by 2.85 percentage points across its first half.
“We decided to improve profitability by focusing on gross margin, delivering another significant increase, which in part resulted in slightly lower sales,” he said.
The company raised its full year guidance for the division’s gross margin to 2 to 2.5 percentage points from up 1 to 1.5 percentage points previously.
Like-for-like sales at its food business were up 0.2%, a result the company classed as an outperformance. It opened 32 new Simply Food stores in the first half.
M&S.com sales surged 30.2%.
Underlying profit before tax rose 6.1% to £284 million and it hiked the dividend 6.3% to 6.8p a share.
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