Byline: James Fallon

LONDON — Things aren’t getting any better for Marks & Spencer PLC. But, at least, they’re not getting any worse.
The struggling U.K. retailer Wednesday said its sales in the 16 weeks ended July 15 were up 3.2 percent versus the comparable 1999 period, but rose only 0.9 percent on a same-store basis.
Excluding an extra week gained in the last 53-week financial year, however, the figures showed sales for the 15-week period up only 1.8 percent and down 0.2 percent on a same-store basis.
“Sales for the last quarter show no more than a continued trend of stabilization in our U.K. trading position,” Luc Vandevelde, Marks & Spencer’s chairman, said in a statement. “The market will remain tough for the foreseeable future and we have undertaken significant change within our organization to refocus on our customers and compete effectively in this environment.”
Vandevelde joined Marks & Spencer in February from Promodes SA.
The main problem area for Marks & Spencer — and by far its greatest source of revenue — remains apparel. Sales for this critical category in the 16-week period were up 3.1 percent, but only 0.3 percent on a same-store basis. The mid-priced market in the U.K. is experiencing a major shakeout as a result of increased demand for higher-priced branded clothing on the one hand and for discounted products on the other. Marks & Spencer isn’t the only retailer affected — the specialty group Arcadia PLC continues to struggle, while the European chain C&A announced plans in June to shut all 109 of its U.K. stores over the next six to nine months.
Marks & Spencer, the largest retailer of apparel in the U.K., has attempted to fight back by launching collections under the sub-brand Autograph — designed by such U.K. designers as Betty Jackson, Matthew Williamson and Katharine Hamnett — sharpening prices on its more basic lines and remodeling its stores. Vandevelde said Wednesday that the retailer will roll out its new concept store to 20 more sites over the next six months following a trial in three stores. The remodeling will cost an estimated $90 million, he said, adding the first new concept stores have “comfortably exceeded our cost of capital and we believe the additional stores will deliver similar success.”

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