City expects sales fall at M&S clothing division in spite of glittering ad campaign

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A GLITTERING advertising campaign featuring models strutting their stuff in Marks & Spencer partywear is unlikely to have reversed the fortunes at the retailer’s embattled clothing division this Christmas.

The City expects third-quarter like-for-like sales at the general merchandise arm, which includes womenswear, to fall by around 2 per cent, following a 1.9 per cent drop in the previous three months.

Clothing retailers have been impacted by what is shaping up to be the warmest December in 100 years, while Black Friday sales in November have led a number of high street chains, such as H&M, Gap and Jack Wills, to begin their Christmas sales early.

But Marks & Spencer has not joined the widespread discounting on the high street, which helped it boost underlying pre-tax profits in November by a better-than-expected 6.1 per cent to £284m in the six months to September 26.

The retailer is also expected to turn in another decent performance in its food division, with flat like-for-like sales, although this is a drop on sales up by 0.2 per cent over the previous three months.

But this comes against the ongoing supermarket price wars, as major grocers battle discounters such as Aldi and Lidl, which has led to more than a year of falling prices.

Chief executive Marc Bolland said at the firm’s July annual meeting that he will continue to cut back on promotions and implement better product sourcing to bolster margins at its general merchandise division, which holds its key clothing unit.

Analysts at Jefferies said: “M&S has generally maintained the view it is better to miss sales and protect margin than slip back into unplanned promotions.” In May, M&S posted its first annual profits increase in four years.

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