New Marks & Spencer boss starts with familiar sales decline
British retailer Marks & Spencer on Thursday reported another fall in quarterly underlying sales in its clothing division, illustrating the extent of the challenge facing its new boss.
Steve Rowe, an M&S veteran of 26 years, succeeded Marc Bolland as chief executive of the clothing and food stores group on Saturday, stepping-up from the role he took on only last July as the head of the troubled general merchandise division.
He started his tenure with a familiar sales decline in that division, which consists of clothing, footwear and homeware.
For the 13 weeks to March 26, M&S's fiscal fourth quarter, sales of general merchandise at stores open over a year fell 2.7pc.
Though that was better than analysts' consensus forecast of a 3.4pc decline and a third quarter fall of 5.8pc, it still meant the division has enjoyed just one quarter of like-for-like sales growth in 21 quarters.
M&S did, however, guide to a rise in full-year general merchandise gross margin of 240 to 250 basis points, compared with a previous forecast of the top end of 200 to 250 basis points. All other trading guidance was unchanged.
"Although the sales decline in clothing and home was lower than last quarter, our performance remains unsatisfactory and there is still more we need to do," said Rowe.
"Turning around our clothing and home business by improving our customer offer is our number one priority. I will update you on my thoughts on the business in May."
M&S’s food business is performing much better than clothing, outperforming the wider market. However, its like-for-like sales were flat in the fourth quarter, ending a run of 25 straight quarters of growth.
Shares in M&S have fallen by a quarter over the last year and late last month hit an 18-month low after Simon Wolfson, CEO of rival Next, warned this year could be the toughest since 2008.