M&S posts best clothing sales performance for six years

United Kingdom apparel retailer Marks and Spencer has announced upbeat results following surge in sales of clothing and homeware section for the first time in two years.

In its food division, M&S reported that like-for-like sales nudged up by 0.6 per cent, but total revenues jumped by 5.6 per cent. Rowe added that customers continued to recognise its products as "special and different".

The department store was cautious to celebrate the result, stating that around 1.5 per cent of the clothing sales boost was down to extra trading days. Associated British Foods said total sales at low-priced outfitter Primark climbed 11 per cent in the 16-weeks to January 7 also striking an upbeat note.

M&S, like rival Next, has been hit by the rapid growth of fast-fashion retailers such as H&M and Zara on United Kingdom high streets, selling clothes at cheaper prices to the mid-market incumbents.

In November Rowe, who replaced former boss Marc Bolland in April, announced the retailer would close 30 United Kingdom clothing and homeware shops and convert dozens more into food stores.

The group's global arm saw sales lift 2.9% on a constant currency basis.

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"I am pleased with the customer response we have seen to the changes we are making in line with our plan for the business", commented M&S chief executive Steve Rowe.

Honor Strachan, lead analyst at Verdict Retail, believes M&S took a huge risk to footfall and volumes to significantly reduce the level of promotions and discounts in third-quarter, given the intensity of price cuts elsewhere on the high street and greater retailer participation in Black Friday.

He said: "We intend to grow the business".

Rowe, however, cautioned that the company's fourth-quarter sales will be adversely affected by sale timing and a later Easter, while reassuring investors that the group's full-year guidance remained unchanged.

Investec analyst Kate Calvert said M&S was "playing catch up" and that it was "too early to call a victory" because consumer spending is expected to slow this year.

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