Marks and Spencer, the UK's largest clothing retailer, said apparel sales resumed their decline in the first quarter as customers took time to adapt to the company's redesigned website.
Same-store sales of clothing fell 0.6 per cent, the London- based retailer said today in a statement, reversing the previous quarter’s 0.6 per cent growth. Online sales slid 8.1 per cent.
Marks and Spencer has said that February's introduction of a redesigned website will weigh on sales for six months as customers re-register for accounts and learn to navigate their way around it. The drop in online revenue is the latest setback for chief executive officer Marc Bolland, who has presided over 12 consecutive declines in non-food sales.
“We deem this to be another disappointing update,” Clive Black, an analyst at Shore Capital, said in a note. The drop in dot-com sales “leaves a bitter taste for investors.”
Marks and Spencer shares rose in London as the retailer said it is leaving financial guidance for the year unchanged. The stock was up 0.7 per cent at 436 pence as of the 8 a.m. open. The gain reflects “another mild sense of relief that things could have been worse,” Mr Black said.
Same-store sales of general merchandise, a division that mostly comprises apparel, fell 1.5 per cent in the 13 weeks ended June 28th, MandS said today.
Helping offset the decline in online sales, women's wear returned to growth in the quarter, the company said. Same-store sales in the key category were up "slightly," chief financial officer Alan Stewart said on a conference call. The retailer said it's "on track" to meet its profit margin objectives for the year. Growth in clothing sales remains elusive for Mr Bolland, who has introduced two collections under a new team headed by former Jaeger chief executive Belinda Earl, and invested £2.3 billion in revamped stores and the new online infrastructure. "We have seen a continued improvement in clothing, although as anticipated the settling in of the new MandS.com site has had an impact on sales," Mr Bolland, who will face investors at today's annual shareholder meeting, said in the statement.
Bloomberg
