Bolland defends M&S's clothing performance
Marks & Spencer CEO Marc Bolland moved to defend the retailer's clothing performance today (22 May) after full-year sales rose by just 0.2%.
"I think we've done well in a difficult environment. Our clothing, by the way, has been up 0.2% so we're talking about mere percentages," he told journalists after the retailer's full-year results were released.
Admitting that it was "not the best of performance," he emphasised that the growth was achieved despite economic downturn.
He added that the UK clothing market has been "highly promotional" and that the retailer managed gains in men's wear, lingerie, and children's wear, but a "mixed" performance in women's wear and home.
Bolland said Marks & Spencer's position as the largest clothing retailer in the UK makes it "a bit more vulnerable" in a highly promotional environment, adding that it is easier to "get at" someone who is bigger than somebody who is smaller.
However, he emphasised that the retailer remains "less promotional than the market".
The comments came as the store group reported a 1.2% drop in underlying profit before tax to GBP705.9m (US$1.11bn) for the year ended 31 March, as group sales increased 2% to GBP9.9bn. UK sales rose 1.5% over the year, with like-for-like sales edging up 0.3%.
Bolland revealed that M&S now plans to slow the pace of its growth in the UK, and expects to increase its UK real estate by 3% this year, 2.5% the following year, and a further reduction thereafter. Of this growth, it intends to largely focus on developing its Simply Food stores as it sees the share of non-food products bought online grow.
Internationally, Bolland said the company will look to open some 100 stores per year going forward and that it will have around 10 websites in place by the end of the year.
Commenting on the results, Conlumino analyst Neil Saunders said: "Looking ahead, M&S has much more work to undertake if it is to accelerate growth, and nowhere is this truer than in clothing.
"While M&S has made some good progress on home and food we feel it still lacks a clear sense of direction on the clothing front, especially in womenswear. Until this is remedied, growth in both sales and profits will remain under pressure."
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