M&S sales hit by web woes

SHA RES IN high street giant Marks & Spencer edged lower yesterday after the retailer admitted the flawed launch of its new website had dealt another blow to sales.

Teething problems including customer registration and navigation issues meant online sales were down 8.1% in the 13 weeks to June 28.

The firm’s clothing and homeware division suffered from the disruption as it recorded its 12th quarter in a row of falling underlying sales — down 1.5% on a year ago.

The problems failed to cheer investors at the company’s annual meeting yesterday but chief executive Marc Bolland attempted to offer some encouragement by announcing that womenswear sales were up “slightly” for the second quarter in a row.

He also pointed to an 11% rise in sales of its Limited Edition summer range as a sign that last year’s hiring of new fashion executives and numerous celebrity-driven marketing pushes were starting to pay off.

Mr Bolland said: “We have seen a continued improvement in clothing, although as anticipated the settling in of the new M&S.com site has had an impact on sales.”

The company is simplifying parts of the website, which has 3.2 million users, and expects a return to online growth by the time the peak trading period in November comes around with a plan to register six million users by the year end.

Chairman Robert Swannell was given the task of handling investor concerns at the annual meeting as shareholders were given their first chance to quiz the board following a third straight year of falling profits.

However, he appeared to deflect shareholder anger with a candid admission that “we didn’t meet our expectations” and confirmation that no bonuses were paid to executives.

Instead, he was left answering questions about slippers and womenswear garments.

Investors were also updated on the fortunes of M&S’s food, which continues to outperform a market beset by supermarket price wars with like-for-like sales growth of 1.7%.

While profits have fallen for three consecutive years, M&S said it was on track to meet forecasts for an improved 2014-15 pre-tax profit of £663m, up from the £623m last year.

Keith Bowman, equity analyst at Hargreaves Lansdown stockbrokers, said M&S remained a work in progress and said Mr Bolland was “still being given the benefit of the doubt” by the City.

However, Edison Investment Research analyst Neil Shah said M&S was showing signs of pulling out of the doldrums.

He said: “With food continuing to outperform the market, a resurgent clothing offering helping to turn the corner for general merchandise, M&S is on course to deliver one of its better all-round performances for several years.”

Shares in the retailer closed down 1.34% at 427.4p.