In the money: Marks & Spencer women's wear sales take a hit
Marks & Spencer chief executive Marc Bolland admitted today (10 January) that women's wear sales fell during the third-quarter, even though heavy promotions lifted the retailer's overall clothing sales.
Speaking as the retailer released its third-quarter trading update, Bolland said women's wear sales were "slightly down" on the same period of last year.
Bolland, who leads the UK's largest women's wear retailer, noted the channel was "doing well" but was "under pressure in some categories". While he would not reveal which were struggling, he highlighted successes in sleepwear, thermals and footwear, adding that sales of the retailer's Autograph range were up 15% over the quarter.
He said that women's wear is one of the "most competitive areas", describing it as the "heart of competition" on the high street, where "everyone began playing on price".
"I think that when walking the high street, that's [women's wear] the core of price promoting, not only with us but with our colleagues in the market. So that's been the focus of pricing discussions," said Bolland.
He added that research has shown that during "tough times", women put their children first - which helped to explain why the retailer recorded its biggest ever quarter in children's wear. Bolland also said men's wear recorded a strong quarter, with occasion wear seeing a particularly good performance.
Over the three months to 31 December, clothing sales rose 1.1% as total sales increased 2.4%. On a like-for-like basis sales increased 1.8%. General merchandise sales fell 0.8%, and were down 1.8% on a like-for-like basis.
While the retailer admits that the highly promotional environment in general merchandise will impact margins, this shortfall should be made up through a series of savings generated by the "tight management of costs".
Bolland emphasised that most of the retailer's promotional activity through November and December was planned and that it was not discounting in a "distressed" fashion.
"We read what the high street was doing, we read what the market was doing, it was not discounting, it was a carefully planned way of making sure that certain items and certain categories were on offer," said Bolland.
"The word discounting means you have to get rid of things. That's not how we work, we had things at the right time that we wanted to get out there."
Indeed, finance director Alan Stewart emphasised that the retailer has "come out clean" in terms of women's wear inventory following Christmas. "We delivered what we wanted to deliver and we sold what we wanted to sell," he said.
Stewart added that clothing suppliers had not been asked to contribute to the additional discounting that has taken place and that there has been "no change" to its original supplier agreements.
While Bolland was coy about the retailer's promotional plans for 2012, he said that M&S has been working to give consumers what they want, either through low entry level prices combined with "relevant promotions" on "things they really need", and that the company will continue to "read the customer well".
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