Pressure on Marks & Spencer boss Marc Bolland intensified today as yet more sales disappointment overshadowed the retailer’s annual meeting at Wembley Stadium.
The high street bell-wether — overtaken by Next in the profit stakes this year — chalked up a 12th consecutive sales fall in its prized general merchandise division, which includes its all-important womenswear offering.
Bolland blamed the latest decline on the stuttering launch of the retailer’s website, which analysts labelled a “fiasco”. The share price fell 1% or 5.1p to 428.1p.
Chairman Robert Swannell was set to give his full backing to the Dutch boss at the Wembley meeting, but serious problems with the £150 million new website helped push like-for-like clothing sales down 0.6%, and overall general merchandising down a worse-than-expected 1.5%.
The latest decline underlines the challenge faced by M&S’s new UK retail chief Laura Wade-Gery, who has given increased responsibilities last week.
Bolland insisted the 8.1% fall in web sales was due to a “settling in” period but admitted turnover on the site would not recover until Christmas.
He said: “It is not an issue with the website. The conversion [turning online visits into sales] was expected to be lower because we brought a lot more [editorial] content, but it is now a lot more inspiring. It’s a journey and I’m pleased with the journey.”
But analysts were scathing. Neil Saunders at Conlumino said: “After the significant investments made, a result of very negative sales over the past three months is highly disappointing, especially since this part of the market is witnessing growth in double digits.”
And Clive Black, retail analyst at Shore Capital, said: “The dot.com fiasco — and that is what it looks like, noting as we do many more complaints over praises for the current proposition — leaves a bitter taste for investors, to our minds.”
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M&S has struggled with encouraging customers to re-register with the new website. Bolland said 3.2 million of the six million who had previously used the old site had moved across.
He was also unable to say when general merchandising or womenswear sales would return to positive territory.
But Bolland also revealed that despite a fall in clothing sales, M&S was selling more full-priced items and was weaning itself off high levels of promotions.
At the food division, sales continued to impress, up 1.7%, helping total group sales rise 2.3% — and a sign that shoppers are not being enticed away from its food halls to discounters Aldi and Lidl, unlike its supermarket rivals.
