Feeble M&S serves up late Christmas turkey

MARC Bolland suffered a fresh embarrassment after high street giant M&S was hammered by disappointing Christmas sales in every part of its business.

Shares in Britain’s biggest clothing retailer fell 3.5pc or 16.3p to 446.9p as the crucial Castle Donington warehouse failed to cope with picking and packing items over the festive season.

M&S also blamed disappointing clothing sales on warm autumn weather that also caused rival Next and others to issue profit warnings.

International business suffered from currency fluctuations and even its starperforming food business missed forecasts. Chief executive Bolland insisted food sales had performed strongly but on the other areas he conceded: ‘I hold up my hands, this is disappointing.’

Underlying sales in general merchandise, which includes clothing, were down 5.8pc, the 14th consecutive quarterly decline, and Bolland has overseen a reversal of what was once an area of improvement.

Bolland has been under pressure to turn around the clothing business, bringing in former Debenhams boss Belinda Earl, but investors are losing patience after this latest quarterly update.

Veteran analyst Nick Bubb described the figures as ‘awful’, saying only cost-cutting saved the retailer from a profit warning.

And David Buik, of stockbroker Panmure Gordon, was sharply critical, saying: ‘M&S’s efforts with general merchandise in the last quarter – vital as it includes Christmas – could only be described as disgraceful and unacceptable.

‘How much longer must the market and fund managers put up with the wave of excuses and false promises that life is getting better? Marc Bolland’s credibility has taken another huge knock.’

Neil Saunders, managing director of research firm Conlumino, said the negative influences on fashion over the festive period were threefold; two had affected all clothing players, while the other was particular to M&S.

‘The first two issues are related, namely the unseasonable weather and greater levels of discounting,’ Saunders said. ‘The third issue, peculiar to M&S, is online. We believe that M&S has much more work to do with its online proposi- tion: this is wider than just getting the logistics right, the website is less than optimal and overcomplicates... buying.’

M&S saw underlying food sales rise 0.1pc, ahead of the wider market but lower than the 0.9pc analysts had predicted.

There were record food sales over the festive period, up 17pc in the key Christmas week. It launched nearly 750 new products and one in four Christmas turkeys came from M&S. Online sales fell 5.9pc and international sales down 5.8pc.

Overall the international business was heavily affected by the worsening currency and political

‘Bolland’s credibility has taken huge knock’

situations across the Middle East and Russia region.

However, its wholly-owned business performed well with strong showings in markets like India.

There was one positive - despite fierce high street competition M&S resisted discounting to protect its profit margin.