Marks & Spencer has reported declines in its home and clothing categories in the first quarter but is pleased with progress of transformation plan, as it reduces promotions and encourages full-price transactions.
Sales in the high street retailer’s clothing & home side of the business fell 0.5% during the 13 weeks ended July 1 and were down 1.2% on a like-for-like basis. It is not specified how much of the sales dip could be attributed to home categories but other retailers have reported declines due to a weak clothing market.
Group revenue increased 2.7% in the 13 weeks to 1 July 2017 (up 1.8% in constant currency), bolstered by M&S’ food offering.
M&S chief executive Steve Rowe said: “Trading in the first quarter was in line with our expectations and we are on track with delivery of the plan we announced last year. I am pleased that we continue to grow full-price sales in clothing & home, with reduced discounting and no clearance sale in the quarter.
“In our food business, we delivered strong growth from new Simply Food openings, and are prioritising better ranging and stronger promotions.”
In line with M&S’ strategy, full-price sales in clothing & home were up around 7%, as the retailer reduced the number of promotions it ran in the departments. The decision not to run a clearance sale in the quarter, compared with one last year, also helped the figure. There will be a greater focus on ranging and promotions in its food category, however, as competition in that market intensifies.
Mr Rowe continued: “We start our summer sale today, a week later than last year, with terminal stock for the season significantly down.”
International revenue increased 3.8% (down 4% in constant currency). The retailer pushed ahead with plans announced last November to close loss-making stores and exit 10 international markets within Europe, the Middle East and Asia, as it switches its overseas business to a franchise model. It has now closed 28 of 53 stores in the owned markets it is exiting. Retained owned and franchise revenue was up 9.4% (1.4% in constant currency) for the quarter.