Marks & Spencer defends its plan as fashion revival collapses

Marks & Spencer boss Steve Rowe’s bid to revive the bell-wether retailer’s long-suffering clothes arm fell at the first hurdle today as sales slumped.

After returning to growth for the first time in almost two years over Christmas, M&S’s same-store fashion sales were back in negative territory in its fourth quarter, plunging 5.9%.

Rowe, an M&S lifer who took charge of the chain last April, blamed clothing’s performance on changes to its calendar, including the removal of sales events.

Rowe (pictured), who started his career on the shopfloor, is attempting to revive the division by breaking the cycle of promotions and concentrating on stylish, everyday essentials.

He has also revealed plans to dedicate more floor space to food, shut stores and quit loss-making markets abroad.

Today he insisted early evidence showed his strategy was working, highlighting a 2.7% rise in full-price sales across its full-year.

“I don’t think it’s a weakening trend when you correct for adjustments to the calendar,” he said.

“We are not complacent, we’ve got to be really clear there’s a tough trading environment. These changes will make a difference to the top line. We have more to do, but we are on track.”

Rowe did not anticipate any improvement in the clothing market, which has suffered amid consumer spending shifts towards leisure and travel. He added that consumer confidence remains “fragile” because of concerns about the wider economy.

He also defended the recent appointment of Halfords and ex-McDonald’s UK boss Jill McDonald, who will lead the clothing and home business from the autumn.

Analysts had questioned her lack of experience selling fashion, but Rowe said she provided balance to the team. “Jill brings fantastic customer insight into the business.

“She has great operational experience from McDonald’s and retail experience through Halfords. It’s a great combination.”

In food, fourth-quarter same-store sales slipped 2.9%, hurt by the later timing of Easter, and the weaker pound drove up costs denting its margin.

Across the full-year, M&S’s group sales were up 2.2% at £10.6 billion, and pre-tax profit dived more than 63% to £176.4 million partly because of the cost of changes to pay and pensions, the closure of international stores and head-office cuts.

Stripping those out, profit was down 10.3% at £613.8 million, exceeding analyst expectations.

The company did not provide sales or profit guidance for the full-year, but it did warn of rising costs in the UK as it takes on new space and deals with cost inflation.

The City responded positively to the results, sending shares up 4.2p to 391.90p.

Broker Peel Hunt said: “We think that M&S is doing a lot of the right things and that, in a tough market, the shopper is responding relatively well.”