Marks & Spencer Non-Food Sales Drop Less Than Anticipated

LONDON, United Kingdom — Marks & Spencer Group Plc, the U.K.'s largest apparel retailer, reported a smaller-than- anticipated decline in general merchandise sales as demand for women's clothing picked up.

Non-food sales at stores open at least a year fell 0.6 percent in the 13 weeks ended March 29, the London-based retailer said today in a statement. That compares with a median estimate of a 0.9 percent decline of 19 analysts surveyed by Bloomberg News. Food revenue advanced 0.1 percent on the same basis, topping a median estimate for no change.

Chief Executive Officer Marc Bolland has pledged to revamp clothing sales at the retailer, investing in improving its style and online offering. The company’s core customers, women of ages 50 to 70, still deem Marks & Spencer’s too frumpy and expensive, according to a focus group, Jamie Merriman, an analyst at Sanford C. Bernstein, said last month.

“Despite some improvement in consumer confidence, we remain cautious about the outlook,” the company said. The fiscal-year gross margin at its U.K. business probably declined by 20 basis points, the retailer said.

M&S rose 0.6 percent to 456 pence at the close yesterday in London, extending the gain to 5.4 percent this year.

Bolland is counting on the company’s new website and advertising campaigns featuring celebrities including actress Emma Thompson and singer Rita Ora dressed in the new spring/summer collection to boost sales.

He also plans to open 250 stores internationally over three years, including food outlets in France and the addition of a local partner in China. The goal is to raise profit outside the U.K. by 40 percent over the next three years, he said last week.

By Gabi Thesing; Editors: Celeste Perri, Tom Lavell