In the money: Marks & Spencer moving in the "right direction"
Bolland insists that M&S is moving in the right direction
Marks & Spencer's general merchandise sales continued to fall in the third quarter. But according to chief executive Mark Bolland, the UK retailer and its efforts to turn around its women's wear business are moving in the right direction.
Speaking to investors and analysts today (9 January), Bolland said the unseasonable weather in October adversely affected the retailer's general merchandise business, and that footfall was down across the sector as a whole.
"I must confess that this was not an easy Christmas," he admitted.
"Promotionally, we kept through November full price and our full price sales were up both in November and in December, but particularly in November.
"And if we look at our full price stance, we tried to hold it quite long. However, the market turned extremely promotional, both in November and particularly in December. Holding the nerve was certainly something we were doing, but the market didn't."
The retailer reported a 2.1% decline in like-for-like general merchandise sales during the 13 weeks to 28 December, while total general merchandise sales slipped 1.1%.
Questioned about when M&S is likely to return to positive like-for-like growth in general merchandise, particularly women's wear, CFO Alan Stewart remained coy.
"For us, it's the direction of travel and where we're going and that step-by-step approach, and that's the important thing."
During the key Christmas trading period, however, M&S saw general merchandise sales climb 1.5%, and like-for-like general merchandise sales edge up 0.5%.
Breaking the Christmas results down against what Bolland described as the "strange" month of October, he explained: "If we single out the Christmas trading, we see that product is right, people buy better on full price, the advertised lines have sold through, we came out with a clean stock position, [and] the step by step approach is still there."
What is also encouraging, Bolland noted, is that the company has stabilised its market share, with women's wear market share growing for the first time in three years during the quarter.
"We are on a larger transformation," he explained.
"We have said that we want to make .com an important part of our business. We have gained market market share in .com larger than anyone else in the top 20 - from 6.4% to 7.2% - so we are the number three player in e-commerce in clothing in the country, and we're nearly taking over the number two position because the growth rate we have at the moment is very strong."
"We are doing exactly the right thing in terms of investing in the right direction, but also growing faster than anyone else in .com. And that's really encouraging."
When asked whether he still retains the support of the board given the latest drop in general merchandise sales, Bolland said: "It's not about my own position.
"I'm here to talk about company performance and the steps we're taking to improve this business. It is all about the business for me and I think the business is taking the right steps."
While Stewart added: "The board is behind us. We're behind the strategy, and the shareholders are behind us and behind the strategy."
Click here to see what the analysts have to say about M&S's trading results.
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