M&S looks for new clothing strategy, sales fall

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British retailer Marks & Spencer on Tuesday posted an eighth consecutive quarterly fall in underlying sales of general merchandise, though the outcome did represent a slowing in the rate of decline.

The performance will ratchet up the pressure on management to deliver a swift turnaround when new season ranges start hitting the shops later this month.

The 129-year-old group, which serves 21 million customers a week from 766 British stores, said sales of non-food products, spanning clothing, footwear and homewares, at stores open over a year fell 1.6% in the 13 weeks to June 29, its fiscal first quarter.

That compared with analyst forecasts of a fall of 0.2% to 3.0%, according to a company poll of ten, and a decline of 3.8% in the fourth quarter of the group's 2012-13 financial year.

Marc Bolland, chief executive since 2010, is pinning his hopes on a new clothing strategy based on more stylish and higher-quality garments.

Autumn/winter ranges were unveiled in May by his new general merchandise team, led by John Dixon, the former boss of M&S food, receiving generally positive reviews from both analysts and the fashion press, and sending M&S shares, which have also been buoyed by periodic bouts of bid speculation, to a five-year high.

Sales data for the fiscal first quarter will be the last to fully reflect garments purchased by the previous buying team.

Though the first quarter outcome represented M&S's best non-food performance since the same period in 2011, when like-for-like sales were flat, the firm did benefit from easy comparative numbers, as in the first quarter of its last financial year like-for-like sales had slumped 6.8%.

M&S's food business, which contributes over half of group sales, is performing much better.

Its sales on the same basis rose 1.8% versus analyst forecasts of a rise of 1.0% to 2.0% and an increase of 4.0% in the previous quarter.

The food business is benefiting from product innovation, a focus on providing for special occasions and M&S's avoidance of any involvement in a scandal over foods found to contain horsemeat when they were labelled as containing other meats.