LONDON — The beleaguered Marks and Spencer Group is turning a corner with a revenue gain of 5.9 percent in the third quarter, due to increases in food and in its struggling clothing and home division.
The company said in a trading update that sales in its food division were up 5.6 percent, while clothing and home rose 3.1 percent in the 13 weeks to Dec. 31. The store has been working to slim down and spice up its clothing offer, which is under pressure from fast-fashion brands. Like many British high street chains, M&S is also struggling with the costs of operating too many bricks-and-mortar stores.
“In clothing and home, better ranges, better availability and better prices helped to improve our performance in a difficult marketplace. We also continued to substantially reduce discounting, including over Black Friday,” said Steve Rowe, who took over as chief executive officer early last year.
“Our food business continues to grow market share with customers recognizing our product as special and different. Our Simply Food store pipeline remains strong,” he added. Last year, M&S announced it would close or downsize a number of stores internationally and in the U.K. as it seeks to expand space for food and shrink the size of departments dedicated to clothing.
Rowe warned that fourth-quarter numbers would be adversely affected by sale timing and a later Easter. “Against the background of uncertain consumer confidence, the business remains focused on delivering the strategic actions announced last year,” he said.
The company specified that on a like-for-like basis, clothing and home sales rose by 2.3 percent. It said that stock that went into sale during the quarter declined by about 7 percent, with one fewer clearance event than last year.
With regard to food, M&S said the quarter was characterized by a slightly later build to peak trading, as a result of Christmas Day falling on a Sunday. “We continue to grow market share,” the company said.
International sales were up 2.9 percent at constant currency, benefiting from earlier shipments of spring ranges to franchise partners. M&S said full-year guidance remains unchanged. “We continue to manage the business for the uncertain consumer outlook,” the company said.