Marks & Spencer share price outperforms as clothing sales rise

M&S store

For the 13 weeks to the end of December, the company's financial third quarter, M&S reported total year-on-year sales growth of 5.9%, with sales in constant currencies rising 4.3%. That complemented another strong quarter for M&S's Simply Food stores, where like-for-like sales were up 0.6% against a strong comparative and total sales rose 5.6%, driven by new store openings.

Mr Lewis, who has been leading an overhaul since he took over from Philip Clarke in 2014, aims to slash costs by £1.5 billion over the next three years to help boost margins and return the group to bottom-line profit growth.

The company's new chief executive Steve Rowe commented, "I am pleased with the customer response we have seen to the changes we are making in line with our plan for the business".

It cautioned over a knock-on hit to fourth quarter figures due to the timing of sales as well as a later Easter this year.

M&S's clothing sales have been disappointing for the past five years despite constant efforts to turn the ship around. "We continue to manage the business for the uncertain consumer outlook", Rowe added.

The group has been revamping its clothing offer, cutting everyday prices for almost a third of its ranges, and increasing staff numbers on the shop floor.

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The clothing, homewares and food retailer is in the midst of a major restructuring, shifting the emphasis in a large number of its stores away from its struggling clothing business and towards its popular grocery arm.

The group's turnaround actions should help M&S ride out the tougher conditions, he said.

In November Rowe, who replaced former boss Marc Bolland in April, announced the retailer would close 30 United Kingdom clothing and homeware shops and convert dozens more into food stores. The retailer said sales rose 2.7 per cent over the period.

"With a slowdown in consumer spending expected in the year ahead, we believe this could well go negative again", she added.

Peer Debenhams reported that group like-for-like sales rose 3.5 per cent for the 18-week period to January 7, similarly bolstered by non-food items like beauty and gift sales, but chief executive Sergio Bucher also cited "challenges in the broader environment".

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