Marks and Spencer shake-up as non-food sales fall

Retailer Marks and Spencer overhauled its top team last Tuesday after reporting its worst performance in non-food sales for more than three years.

The retailer is now worth less than rival Next on the London stock market, while online fashion store Asos added to the strain

Kate Bostock, who is responsible for clothing ranges as head of general merchandise, will leave the group in October, with former Debenhams and Jaeger boss Belinda Earl coming in as style director.

The 6.8 per cent decline in clothing and general merchandise sales in the 13 weeks to June 30 – the worst since December 2008 – will ramp up pressure on chief executive Marc Bolland, who faced shareholders at the company’s annual meeting last Tuesday.

He has blamed continuing stock supply issues and the poor weather conditions for the weak trading figures at the company’s 700 stores in the UK.

The retailer is now worth less than rival Next on the London stock market, while online fashion store Asos added to the strain on M&S by reporting a better-than-expected eight per cent rise in UK sales last Tuesday.

Tuesday’s figures will fuel fears that Marks, the UK’s biggest fashion retailer, is losing its grip on the key womenswear market, with some analysts reporting that its ranges are off-trend.

Independent retail analyst Nick Bubb said: “M&S’s problems in womenswear go far beyond the weather as they are clearly losing market share.”

He added that Ms Bostock, who has been linked with a top job at Asos, had been made a scapegoat as Mr Bolland fought for his job.

Her role will be taken by John Dixon, who has been with the company for 26 years and is seen as a potential successor to Mr Bolland.

Ms Earl, who will work for the chain for two to three days a week, left Jaeger earlier this year after a period of sick leave. She was chief executive of Debenhams between 2000 and 2003 and is credited with rolling out its successful Designers At Debenhams range.

Last Tuesday’s appointments were welcomed in London, with shares up two per cent despite the disappointing sales figures.

Food sales, which were boosted by the celebrations surrounding the Diamond Jubilee, rose 0.6 per cent and meant overall like-for-like sales were 2.8 per cent lower.

The group also said the roll-out of its new design of stores was on track, after it previously admitted its outlets were difficult to shop in. Mr Bolland said the stock issues were a continuation of the problems it reported in April when it did not buy enough of some of its best-selling lines, and said it could have sold more than double the number of pump shoes.

However, Marks is confident that it is taking the necessary steps to address the poor performance of its non-food business.

As well as the shake-up in the management team, it has improved buying and merchandising and believes its stock will be back on target in time for the autumn-winter season, which will be launched in stores later this month.

Sales of coats, jackets and hosiery have done well amid the grim weather but the fall in sales of casual wear hurt it because it traditionally makes up a large proportion of its sales at this time of year.