M&S sales slump as shoppers give a thumbs-down What recession?

MARKS & Spencer, once Britain's foremost retailer, today provided evidence that its recovery is as elusive as ever with the delivery of another disappointing sales performance.

At its annual meeting, the group said sales of clothing, shoes and gifts fell more than 9% in the first three months of the new financial year. Even homeware sales were lower this spring than last.

Total sales, buoyed by a robust performance from the food division, were 2.6% lower, and 3.4% when the impact of new space is excluded.

The numbers were worse than the City had expected and marked a slowdown from the final quarter of last financial year. Finance director Robert Colville said: "These are clearly disappointing sales numbers."

Food sales were 4.8% ahead on a like-for-like basis but many analysts had hoped for a much higher increase.

The company, which has been caught out before by being too optimistic, fought shy of predicting when sales would grow again.

"We could begin to see positive signs of recovery by next spring but we will have to see when that feeds into actual sales growth," said Roger Holmes, managing director of UK retail.

M&S is hopeful, as it has been before, that it is on the cusp of change.

More-effective buying improved initial margins by 3% and better stock control means the net margin has also improved.

The group has assembled a new team of clothing directors in a bid to improve core ranges. To date, however, the key womenswear business continues to decline.

"There are clear signs of a slowdown in the loss of market share in lingerie, menswear and childrenswear. But there is a continued decline in the market share for women and that is where our strongest action is directed," said Holmes.

The group is hopeful its Autumnwear range will lure customers and suggests early feedback has been encouraging. There are also high hopes for George Davies' Per Una collection, due in October.

"I am extremely excited and positive and I sense a great deal of excitement within the business about our autumn initiatives," said Holmes.

M&S has received bids for Brooks Brothers and Kings Supermarkets in the US and its Hong Kong stores. Offers for its property portfolio are expected by the end of the month.

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