Higher clothing sales, including the successful launch of the new Indigo casualwear line, have helped boost second quarter performance at Marks and Spencer Group Plc, but the retailer warned its outlook for the rest of the year remains cautious.

UK like-for-like sales (which strip out the effect of new stores) fell by just 0.5% in the three months to 26 September, suggesting its sales slowdown has stabilised.

Group sales rose by 2.7%, lifted by a 30% jump in online sales and a 9.6% hike in international sales.

General merchandise sales, which include clothing and footwear, were up by 2.2%, M&S said today (30 September), with clothing outperforming the category with a rise of 2.7%.

As well as the Indigo range, which was launched earlier this month, clothing sales were helped by a new designer collaboration with Jsen Wintle in Autograph for men.

Total UK sales were up 1.9% over the period continuing the improving trend seen over the last three quarters.

"We are pleased to report continuing improvement in our performance. This demonstrates that the actions we are taking are working," said chairman Sir Stuart Rose.

But he added: "Whilst there is more visibility in the marketplace and consumers appear more confident, we continue to be cautious about the outlook.

"We expect 2010 to be a tough year and we will continue to run the business accordingly."

The retailer said it expects full year gross margin to be just 50 to 100bps lower than last year, as a result of better stock control, better negotiation with suppliers and lower markdowns.

It also plans to hire 20,000 temporary staff for the Christmas period.

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