Half Marks

9 January 2014 By Quentin Webb

Britain’s biggest clothing retailer surprised with a bad quarter in its key business, in spite of strong food and online sales. CEO Marc Bolland’s turnaround is proving a slog. But a 3.5 pct stock rally suggests investors feared the Christmas numbers would be even worse.

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Marks & Spencer, Britain’s largest clothing retailer, said non-food sales fell by a larger-than-expected 2.1 percent in the three months to Dec. 28. Analysts had expected so-called “general merchandise” sales in stores open more than a year to fall by 0 to 1.5 percent. GM sales, which include clothing, footwear and homewares, have now fallen for 10 quarters running.

In a statement on Jan. 9, M&S said food sales rose 1.6 percent, ahead of analysts’ expectations for a rise of 1.1 to 2.5 percent. The company, led by Chief Executive Marc Bolland, cut its guidance for full-year UK gross margins to flat, from a previous forecast of a 30 to 50 basis point rise.

Shares in M&S rose 3.4 percent by 0940 GMT, to 460 pence a share. When M&S presented its fiscal second-quarter results on Nov. 5, the shares closed at 509p.

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