Marks and Spencer sales slumped ahead of Brexit vote
Marks & Spencer reported a marked deterioration in clothing sales as subdued consumer spending ahead of last month’s Brexit vote added to difficulties facing the struggling UK retailer.
Same-store sales of clothing and home goods fell 8.9 per cent in the 13 weeks to July 2, the company said in a statement yesterday. Analysts expected a 5 per cent 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 stabilise the retailer’s shrinking share of clothing spending, while also facing decisions on the future of an embattled international unit and the UK 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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