Marks & Spencer’s new chief executive has pledged to restore the fortunes of its beleaguered clothing business after reporting another slide in sales.
Steve Rowe branded the performance as “unsatisfactory” after like-for-like sales in its clothing and home division tumbled 2.7% in the 13 weeks to March 26.
The high street bellwether said its clothing arm had come under pressure in the fourth quarter after a flat market and price deflation created a “challenging backdrop” for trade.
But shares in the company soared more than 3.5%, as it beat City expectations of a 3.4% fall and improved on the third quarter when sales slumped 5.8%.
Mr Rowe, who took over from Marc Bolland on Saturday, said reviving the retailer’s clothing and homes business was his “number one priority”.
It comes after he announced earlier this week that he would remain in charge of the clothing business because he was “personally committed” to getting it right.
Meanwhile, the retailer could take some cheer from the strength of its food business, as it beat the market to post flat like-for-like sales over the period.
Mr Rowe said: “We had a mixed performance in the final quarter of the year. Our food business once again outperformed the market by 3.5%.
“Although the sales decline in clothing and home was lower than last quarter, our performance remains unsatisfactory and there is still more we need to do.
“Turning around our clothing and home business by improving our customer offer is our number one priority. I will update you on my thoughts on the business in May.”
The retail giant’s latest move to revive women’s clothing sales came in February when it sealed a tie-up with TV presenter Alexa Chung to launch a fashion collection inspired by the company’s extensive range.
Since then, Next chief executive Lord Wolfson has warned that retailers face a bumpy road ahead. He said 2016 would be the toughest year the sector has faced since 2008, as it braces itself for a slowdown in consumer spending.
M&S said it had bolstered the number of products in its spring and summer clothing range compared with last year, with sales in its Autograph range climbing 10%.
It added that its food business had benefited after it opened 80 new stores, with market share stepping up 4.3%.
The company said its online business had delivered a “good performance”, with sales rising 8.2% after it ran fewer online-only promotions.
But it warned that its international business faced “challenging trading conditions” which could “heavily impact the full-year profitability”.
Shore Capital analyst Clive Black said Mr Rowe would be a “force of good in the business, one that can build upon a lot of heavy lifting undertaken by predecessor Marc Bolland”.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “Clothing continues to be a rather large millstone around Marks and Spencer’s neck.”
Mr Rowe is expected to shed light on his turnaround plan when the company announces its full-year results in May.
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