UK: Clothing weighs on Marks & Spencer Q3 sales
- Reports 1.8% fall in Q3 like-for-like UK sales
- General merchandise like-for-likes drop 3.8%
- GM performance "is not yet satisfactory"
M&S UK like-for-like general merchandise sales fell 3.8% over the key Christmas trading period
Retailer Marks & Spencer has reported worse-than-expected third-quarter sales figures, with a poor performance in its general merchandise business - which includes clothing and footwear - offsetting strong demand for food.
The company, which was forced to release its results early after they were leaked on Wednesday night, reported a 1.8% fall in like-for-like UK sales for the 13 weeks to 29 December.
A 0.3% rise in food sales was offset by a 3.8% drop in general merchandise.
Total UK sales edged up by 0.3%, with a 2.7% rise in food again offset by a 2.2% fall in general merchandise. Group net sales crept up by just 0.6% versus the same period of the previous year.
The firm said its international business saw sales rise by 4.1% on a constant currency basis, but, in reality, international sales were flat due to weakness in the Euro.
It also said it was "pleased" with a 10.8% jump in multi-channel sales.
"Our general merchandise performance is not yet satisfactory but we are confident that the steps being taken by the new management team will address this," said chief executive Marc Bolland.
M&S last year realigned its general merchandise management team under executive director John Dixon, and includes style director Belinda Earl, Stephanie Chen who is running kids and home, Scott Fyfe as director of menswear, and Frances Russell as director of womenswear.
"In a challenging and highly promotional general merchandise market, we delivered fewer but more targeted promotions, with a focus on full price sales," Bolland added.
"The new general merchandise management team, which started recently, has managed stocks tightly, resulting in slightly less stock into the Christmas sale, and a clean position at the end of the quarter.
"Our spring/summer season, which launches in stores this week, has been well received by the fashion press, and as previously announced, the new team's first seasonal collection will be in store from July with the launch of our new autumn/winter collection."
Looking ahead, the retailer said it expects pressure on consumers' disposable incomes to continue in 2013, and remains cautious in its outlook for the year.
Click here to see what analysts have to say about M&S's trading update.
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