Marks & Spencer Sales Slump Worsens To Add To Rowe’s Challenge
Marks & Spencer Group Plc reported a marked deterioration in clothing sales as subdued consumer spending ahead of last month’s Brexit vote added to difficulties facing the struggling U.K. retailer.
Same-store sales of clothing and home goods fell 8.9 percent in the 13 weeks ended July 2, the London-based company said in a statement Thursday. Analysts expected a 5 percent decline, the median of 24 estimates.
The sales slide provides another indication of the challenge facing Steve Rowe as the new chief executive officer battles to stabilize the retailer’s shrinking share of clothing spending, while also facing decisions on the future of an embattled international unit and the U.K. store base. Rowe succeeded Marc Bolland in April, taking on the task of reversing a clothing sales slump stretching back four years.
“Consumer confidence weakened in the run up to the EU referendum,” Rowe said in the statement. “It is too early to quantify the implications of Brexit.”
Sales were hurt by a reduction in the number of promotional offers and more permanent price cuts, Rowe said. “We knew our actions would reduce total sales but we are seeing some encouraging early signs,” he said.
The retailer’s food unit boosted sales by 4 percent in the quarter, although same-store revenue declined 0.9 percent.
Marks & Spencer maintained its full-year forecasts.
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