M&S: still has the builders in

Clothing and homeware sales at Marks & Spencer fell for the 12th quarter in a row in the three months to the end of June. Like-for-like general merchandise sales were down by 1.5%

The retailer’s relaunched website was partly to blame – online sales slumped by 8.1%. Chief executive Marc Bolland suggested this was a “settling in” period, and said the site should be fine in time for Christmas.

What the commentators said

M&S’s latest figures are “uncannily reminiscent” of a performance by the England football team, said Alistair Osborne in The Times. “Lots of effort, but more evidence of a team getting outplayed by the likes of Next.”

The latest slide represents a poor return on Bolland’s £2bn of spending on the business. The online business was always going to be “challenging”, as it involved shifting customers from an Amazon-run platform to a home-grown one.

Teething troubles included customers having to re-register their personal details, for example. But even allowing for such inevitable hiccups, an 8.1% sales dive is a disappointment.

The “dotcom fiasco leaves a bitter taste for investors”, agreed Shore Capital’s Clive Black. It’s also “curious” that the person who oversaw it, Laura Wade-Gery, is now being promoted from online boss to head of overall UK retail.

Nonetheless, the trading statement was hardly a complete disaster, said The Daily Telegraph. Food sales rose again last quarter and sales of womenswear – both key categories for M&S – ticked up. “The foundations could finally be in place for clothing sales to grow.”

Don’t hold your breath, said James Moore in The Independent. Remember that trading was “dire” last year, which in turn followed a dismal 2012. And the positive performance in clothing came only when new stores were included. On an underlying basis, clothing sales declined by 0.1%.

Bolland, however, “is ever the optimist”, said Kamal Ahmed on the BBC. He says M&S is on a “journey” and he is enjoying himself.

Yet his three-year plan to revive the business, set out in 2011, failed to work, and now he continues to sound “like a homeowner with the builders in”, insisting the place will be lovely once it’s finished. The M&S revamp is starting to look “never-ending”.


  • Pinkers Post

     In a recent interview, retail consultant Richard Hyman put his finger on the spot: “The market today is different in every conceivable way to that associated with the golden ages.” And the only M&S manager who appears to have faced up to this harsh reality is Jan Heere, outgoing Director of International Operations, who decided to leave the sinking ship before it’s too late. And now Alan Stewart, too, is pulling out. And one cannot blame him.
    It is, of course, not Bolland’s fault. It’s nobody’s fault. The food may be nice (Pinkers loves the Cauliflower Cheese!) but the truth is less palatable: The business model itself is redundant. Selling baked beans alongside ladies knickers? Let’s face it…: The simple truth of the matter is nobody in their right mind would invent M&S in today’s retail environment and not even a magician could turn this business around. It’s almost surprising it wasn’t wiped out with the last dinosaurs 66 million years ago. A classic case of redundant retail: http://pinkerspost.com/inout.php

66% off newsstand price

12 issues (and much more) for just £12

That’s right. We’ll give you 12 issues of MoneyWeek magazine, complete access to our exclusive web articles, our latest wealth building reports and videos as well as our subscriber-only email… for just £12.

That’s just £1 per week for Britain’s best-selling financial magazine.

Click here to take advantage of our offer

Britain is leaving the European Union. Donald Trump is reducing America’s role in global markets. Both will have profound consequences for you as an investor.

MoneyWeek analyses the critical issues facing British investors on a weekly basis. And, unlike other publications, we provide you with the solutions to help you turn a situation to your financial advantage.

Take up our offer today, and we’ll send you three of our most important investment reports:

All three of these reports are yours when you take up our 12 issues for £12 offer today.

MoneyWeek has been advising private British investors on what to do with their money since 2000. Our calls over that period have enabled our readers to both make and save a great deal of money – hence our position as the UK’s most-trusted investment publication.

Click here to subscribe for just £12