Marks & Spencer revealed strong food sales in the crucial Christmas trading period, but a decline in clothing sales as it grapples with the after-effects of last year’s catastrophic cyber attack.
The high street giant’s chief executive Stuart Machin said its clothing, homewares and beauty businesses were also hit by “fragile consumer confidence and mild weather”.
In November, M&S revealed that underlying profits had more than halved to £184.1 million in the six months to September 27, from £413.1 million a year earlier, after a cyber breach halted online orders for more than six weeks.
Machin said poor sales of Christmas fashion were linked to “long-term effects on stock data and management after the event” as well as “reduced crowds on the streets”.
The numbers raise fears that fashion retailers have experienced a tough autumn and winter amid mild weather and pressure on household budgets due to higher energy and food bills.
It is also believed that M&S has lost out to rival Next, which recorded bumper sales over Christmas, partly thanks to its online service.
Machin said the business would “accelerate its restructuring strategy” – whereby it is closing and relocating stores that carry clothing and adding more space for food – “in the context of the uncertain consumer environment”.
M&S now has about 230 full-line stores, including clothing and food, and about 800 food-only stores.
The retailer said sales at established stores rose 5.6% in the three months to December 27, while clothing sales fell 2.9%. Total sales rose 3.3% to £4.15 billion, not including numbers from its Ocado joint venture, for which M&S has started reporting.
Mackin said M&S’s non-food business was “back on track as we work towards the end of the recovery”.
He said the food business gained market share with sales growth driven by strong sales of core grocery items along with new products and upgrades on products such as Italian prepared meals, in-store bakeries and delis.
Sales at its online grocery specialist Ocado rose 13.7% as the number of items ordered increased 10.7% and the number of orders placed increased 11%.
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