M&S clothing sales down |
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| Thursday, 02 October 2008 | |
 Marks and Spencer today reported a significant drop in sales. The decline has picked up pace as the UK's biggest retailer continues to suffer from tough conditions on the High Street. M&S said UK like-for-like sales had fallen 6.1% in the 13 weeks to 27 September. In the previous
quarter sales had dropped by 5.3%.M&S head Sir Stuart Rose said consumer confidence remained fragile and the retail environment was unpredictable. The Company also said it would cut the amount it spent on improving its stores.
BBC business editor Robert Peston said the announcement was significant as it meant M&S would be placing far fewer orders than planned with other businesses."That's a graphic illustration of how the horrors of the financial economy are infecting the real economy," he said. Sir Stuart told the BBC: "We are being a little bit prudent. Customers are being thoughtful about expenditure but that's hardly surprising in the world we live in today. We'll cut our cloth according to our means." Despite the sales slide, M&S's shares jumped on the London market. Analysts welcomed news of the cost cuts and said the sales performance was in line with expectations. By mid-morning, M&S shares were up 20.25p, or 9.6%, at 230.5p. Like-for-like general merchandise sales - which includes clothing - were down 6.4%. Sir Stuart highlighted that looking at total sales, as opposed to like-for-like, gave a slightly different picture. Like-for-like sales exclude the impact of new stores. In clothing the numbers are down about 3% in total terms. Overall group sales were up 0.4%, with UK sales down 1.6%. However, there was a 24.2% rise in international sales and a 34% rise in online sales. Source: BBC Image: M&S campaign |
"Capital expenditure this year is now expected to be around £700m, compared to our previous guidance of £800m-£900m," Sir Stuart said. Customers are being thoughtful about expenditure but that's hardly surprising in the world we live in today.
