M&S fashion ops have tough Christmas but online booms
There was little festive cheer for M&S over the Christmas period with the company’s trading update on Friday showing that the 13 weeks to December 26 saw total sales falling 8.2%.
That divided down into a robust trading performance for its foods operation, but a weak one for Clothing & Home (C&H).
That 8.2% fall in revenue added up to £2.5 billion in Q3, with like-for-like sales dropping 7.6% in the quarter. Before the November lockdown in England, sales had been running at only 3.6% down, but during November they were 19.5% lower. They recovered partially in December to get back to that -3.6% figure.
C&H, which has been the weakest division for the company for some time, saw a 25.1% decline in Q3 and a 24.1% like-for-like fall. Even before the November lockdown, the drop was 16.8%. But this widened to a 40.5% decline in November and only recovered to -19.4% in December.
However, there was better news for C&H online as its revenue rose 47.5% to £353 million. Pre-lockdown, online C&H sales had already been up a healthy 35.6% and during the lockdown they soared 62.2%. They stayed high in December with a 47% rise.
The company continued to move forward with its strategic plans for C&H in the period but said that its “good progress in repositioning ranges and shape-of-buy was concealed by the continuing restrictions and demand distortions”.
During the period, the C&H mix remained “heavily biased to Covid-influenced product such as sleepwear and leisurewear”. And as it shifted to “trusted value, many blanket promotions were removed, and the ratio of full-price sales improved with full-price sales declining a more modest 4.8% and online orders more than doubling”.
CEO Steve Rowe stayed upbeat. He said: “Given the on-off restrictions and distortions in demand patterns our trading was robust over the Christmas period. More importantly beneath the Covid clouds we saw a very strong performance from the Food business including Ocado Retail and a further acceleration of Clothing & Home online.
“Near-term trading remains very challenging but we are continuing to accelerate change under our Never the Same Again programme to ensure the business emerges from the pandemic in very different shape.”
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