M&S boss marked down over retailer’s poor sales

Chief executive Marc Bolland
Chief executive Marc Bolland
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MARKS & Spencer boss Marc Bolland will come under more pressure today when the chain is expected to report another quarter of declining clothing sales.

The chain’s fashion and homewares division is expected to post a 1.5 per cent fall in like-for-like sales for the last three months – making it three straight years of quarterly declines for the division.

M&S’s food division has fared much better and is expected to show growth of around two per cent, aided by the roll-out of its Simply Food stores and a strong performance in the face of supermarket price wars.

The figures will be announced hours before Mr Bolland and the rest of the board are due to face shareholders at M&S’s AGM at Wembley Stadium.

In May, M&S posted a four per cent fall in annual underlying profits in the year to March of £623m, amounting to three consecutive years of falling profits and leaving it tailing behind big fashion rival Next.

It has also been struggling with teething troubles on its website, which was relaunched in February after a £150m makeover that has brought video content and updates on stock availability every 15 minutes.

With some customers having had trouble registering for the new service, the group has admitted the website may take four to six months to “settle in”.

Despite this, the group last week promoted online -executive director Laura Wade-Gery to take control of its high street stores, with many analysts now seeing her as an eventual successor to Mr Bolland. Ms Wade-Gery is the first woman to take charge of the firm’s retail division, which holds 800 UK stores.

The pressure on Mr Bolland has intensified because the retailer has faltered despite a £2.3bn investment drive, the hiring of new fashion executives and numerous celebrity-driven marketing pushes.

Cantor Fitzgerald analyst Freddie George said yesterday: “The initiatives relating to the supply chain and IT address under-investment from the past and bring the infrastructure up to the standards of international peers, but will not, we believe, lead to a significant increase in profits over the medium term.”

The heart of the poor performance at the general merchandise division is clothing, and particularly ladieswear, which is a key part of the group’s sales.

Shore Capital analyst Clive Black said this failure is a “legacy of many years of poor ranges.”

He added that, despite numerous senior management changes, the business still struggles to compete with the clothing ranges at rivals such as Next and John Lewis. Shore Capital said the response to Marks & Spencer’s current spring/summer collection was “muted”, and the broker has “low expectations” for the autumn/winter range.

Cantor Fitzgerald’s analyst Mr George added: “We continue to believe it will take a number of seasons before the existing team is able to manifest a marked improvement in performance in womenswear.

“There has, we believe, been an improvement in the showcase autumn/winter ranges but the branding and the demographic and age profile of the customer being targeted remains unclear.”

However, getting this range right is a crucial piece of the jigsaw because as Mr Black said “ladieswear in the UK remains the heartbeat of the share”.

The firm’s poor annual results in May prompted Mr Bolland to say that he and his senior directors and the firm’s 82,000 staff would not receive a bonus.

Mr Bolland’s annual earnings fell by 26 per cent to £1.59m year-on-year because he failed to hit targets,