SHARES in Marks & Spencer fell sharply in trading yesterday but later rallied as investors reacted to poor non-food Christmas sales, a slump that has cranked up the pressure on the head of the retailer.
Now in his final year of a three-year plan to make M&S an international, multi-channel retailer, chief executive Marc Bolland had on Wednesday reiterated his confidence that a new management team, led by ex-food boss John Dixon, would deliver a better performance at its general merchandise arm. The group had announced sales of clothing, footwear and homewares slumped 3.8 per cent in the 13 weeks to December 29 at UK stores open more than a year, worse than expected and weak in comparison to recent updates from rivals Next, John Lewis and Debenhams.
M&S reported an underlying UK food sales rise of 0.3 per cent.
Analyst reaction to the non-food sales performance ranged from “disappointing” to “dreadful”, with the common theme centring on the rising pressure for Bolland and his general merchhyandise team to deliver.
“M&S has disappointed investors many times and though the reasons have varied – rain, Olympic distraction, buying mistakes, competitor promotions – the conclusion seems increasingly clear that customers are just not happy with M&S’s product and value,” said Caroline Gulliver, analyst at Espirito Santo.
Mr Bolland, the former chief executive of Bradford-based Morrisons, said the non-food slump was in part due to a decision to protect margins with less promotional offers.
Finance director Alan Stewart said his CEO has the board’s support and shareholders are behind the strategy. Analysts believe the Dutchman will be given another year to put it right.
Shares closed down 2.20p at 368.80p.