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M&S sales grow under new boss

13 January 2017

Sales were boosted by non-clothing lines such as beauty and gifts. And M&S Food was only 0.3 per cent like-for-like on the same basis.

Like-for-like sales in its clothing and home ware business grew by 2.3% in the 13 weeks to December 31th.

Marks & Spencer has enjoyed a return to sales growth in its struggling clothing arm for the first time in almost two years, with chief executive Steve Rowe saying he was pleased with the customer response to its new lines over Christmas.

M&S, like rival Next, has been hit by the rapid growth of fast-fashion retailers such as H&M and Zara on United Kingdom high streets, selling clothes at cheaper prices to the mid-market incumbents. That complemented another strong quarter for M&S's Simply Food stores, where like-for-like sales were up 0.6% against a strong comparative and total sales rose 5.6%, driven by new store openings.

M&S shares were up 1.8% at 346.50 pence on Thursday following the announcement, having jumped around 8.0% just after the open.

The clothing sales recovery comes as a welcome boost for Mr Rowe, who has been battling to turn around the beleaguered division since taking the helm in April.

Company's chief executive, Steve Rowe, said "better ranges, better availability and better prices" had helped sales to improve.

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Stock into sale during the quarter declined by around 7%, M&S noted, with one fewer clearance event than a year ago. As a result of this, full-price Clothing & Home sales rose in the period.

Over the shorter seven-week Christmas period to January 7, which also includes the Black Friday promotional frenzy, like-for-like sales were up by 5pc, or 1.7pc in constant currency.

"Our food business continues to grow market share with customers recognising our product as special and different", said Rowe.

"Second, chief executive Steve Rowe flagged the uncertain consumer outlook and began to get his excuses in early for the fourth and final quarter of the company's financial year, highlighting a possible adverse impact from the timing of discount sales and also a later Easter", Mould said.

Worldwide sales for M&S were up 19%, benefiting from weakness in the pound against the euro.

Analysts expect M&S to report full-year pretax profit of 593 million pounds ($726 million) for the year to March 31, down from 690 million pounds in 2015-16.

M&S sales grow under new boss