Agenda-setting intelligence, analysis and advice for the global fashion community.
LONDON, United Kingdom — Marks & Spencer Group Plc reported sinking revenue of non-food items as the U.K.'s largest clothing retailer experienced delays in fulfilling online orders at the busiest time of the year.
Same-store sales at the division that includes the apparel business dropped 5.8 percent in the 13 weeks ended Dec. 27, the London-based company said today. That compared with the median analyst estimate compiled by Bloomberg for a 2 percent fall.
Chief Executive Officer Marc Bolland is struggling to revive the retailer’s clothing sales as shoppers turn to rivals with more-established online offerings such as Next Plc and budget chains including Primark. Marks & Spencer’s Castle Donington distribution center in central England struggled to process a surge of orders prompted by the Black Friday weekend, undermining attempts to restore online sales growth.
“We had a difficult quarter in general merchandise, dominated by unseasonal conditions and an unsatisfactory performance in our e-commerce distribution center,” Bolland said in the statement.
ADVERTISEMENT
Marks & Spencer shares rose 1.9 percent to 463.2 pence in London yesterday, bringing their 12-month advance to 4.1 percent.
Customers last month experienced periods of being unable to place in-store click-and-collect orders for the following day and standard deliveries to home addresses took twice as long as normally promised. The company has made progress in addressing the distribution issues and is now back its normal delivery proposition, it said today.
The delays added to the company’s digital woes, with Marks & Spencer saying last year that a redesigned website introduced in February would weigh on sales for six months as customers re- registered accounts and learned how to navigate it. Online sales fell 8.1 percent in the first quarter.
The retailer’s upscale food division has performed better amid a grocery price war that has squeezed the profitability of big supermarkets from Tesco Plc to Wm Morrison Supermarkets Plc. Same-store sales of food rose 0.1 percent in the quarter, though fell short of the 1 percent expected by the analysts surveyed.
By: Paul Jarvis; editors: Celeste Perri and Thomas Mulier.
