M&S Profits Up But Warm Autumn Hits Clothing

Written By Unknown on Rabu, 05 November 2014 | 18.57

M&S has reported a 2.3% rise in half year profits but said its troubled clothing division was hit by an unseasonably warm September.

The retailer's latest results marked a 13th consecutive quarterly fall in underlying sales of general merchandise, which include clothing, while web sales fell more than 6% in the six-month period.

M&S said its margins improved in the first half, helping it drive underlying profits higher for the first time in four years to £268m and it signalled that shoppers should not expect discounting ahead of Christmas by raising its non-food margin projections.

The food business, which has been growing steadily against a backdrop of struggles elsewhere, continued to impress in the 26 weeks to 27 September with sales up 3.6%.

M&S said the success of its Simply Food stores meant it was planning to open 200 new outlets over the next three years.

The company insisted that it had turned around womenswear - with sales rising 1.3% over five months and improved customer feedback.

It did not provide a six-month figure. 

Chief executive Marc Bolland told Sky News he was pleased by the performance, saying "style is back" and "wraps are in."

Mr Bolland, who took over in 2010, said the group was improving "step by step" but a new clothing team he set up in 2012 has so far failed to deliver a sustained increase in sales.

M&S estimated a 1.3% hit to clothing from "unseasonal conditions" in September - with the mild weather, also charted by rivals Next,  not helpful for shifting high-margin winter coats, knitwear and boots.

Mr Bolland has spent over £2.3bn to address decades of under-investment, overseeing the revamp of products, stores, a new website and marketing.

He said the disappointing internet sales figure was a consequence of the new website, which has cost M&S £150m.

Mr Bolland blamed a "massive change, moving to a new platform."

Shares in M&S, which were down almost a fifth over the past year ahead of today's results, rose 6.5% when trading began on the FTSE 100. 


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