M&S reveals steeper drop in sales in its clothing division

Retail giant Marks & Spencer has revealed a steeper drop in sales in its embattled clothing division after shunning discounts and seeing shopper demand hit by poor weather.

The clothing and food chain said like-for-like sales in its general merchandise arm, which includes womenswear, fell 1.9 per cent in its second quarter, following a 0.4 per cent drop in the previous three months.

But its move not to join in widespread discounting on the high street helped boost underlying pre-tax profits by a better-than-expected 6.1 per cent to £284 million in the six months to September 26th.

On a statutory basis, profits were 22.7 per cent ower at £216 million. M&S added that its new Sparks loyalty card had been “extremely successful”, with 1.8 million customers signing up since its launch two weeks ago.

The group was also helped by another decent performance in its food division, with like-for-like sales ahead by 0.2 per cent in its second quarter, although this marked a slight drop on the 0.3 per cent the previous three months.

Shares lifted 4 per cent as investors cheered the group's forecast-beating hike in half-year profits. M&S boss Marc Bolland said the group delivered "good underlying profit growth" and insisted the chain's decision not to run discounts was the right move, despite leading to a worsening sales performance in clothing, homewares and shoes.

The group said trading conditions on the high street were tough as firms slashed prices to shift stock after being hit by unseasonal conditions over the summer. Mr Bolland said: “We took the decision to focus on profitability and full-price sales.”

M&S has also been making efforts to cut sourcing costs in the general merchandise business, which is helping push up profits. A robust hike in online sales also helped the group in its first half, with M&S.com seeing sales surge by 34.2 per cent.

But this failed to offset a hefty slide in comparable sales in its UK stores, down by 5 per cent to 6 per cent in the half year, according to the group.

PA