Marks & Spencer boss Marc Bolland blamed a vicious Christmas price war as profits came under pressure and sales in the chain’s fashion division fell for a 10th successive quarter.
Mr Bolland refused to answer questions over his future amid continued woes in the company’s beleaguered general merchandise (GM) arm, which includes clothing and homewares.
Sales were down 2.1% for the 13 weeks to December 28 when compared with last year on a like-for-like basis, despite concerted attempts to turn around fortunes with new senior personnel and a major marketing push.
Unseasonably warm weather was blamed for a sharp GM decline in October, but the firm did achieve a 0.5% sales increase in the eight weeks to Christmas Eve.
Mr Bolland said M&S had largely held its nerve on full-price sales during the run-up to Christmas but was forced to act as the high street turned “extremely promotional”.
“Anyone who was on the high street could see on the 14/15 (of December) weekend, the whole market was already red (with offers signs),” he said.
Mr Bolland brushed off questions about his own role at the company and instead highlighted “encouraging signs” for the retailer, including a small growth in market share for womenswear.
However, M&S conceded that its GM margins for the full year would be down by up to 0.5%, a figure which prompted analysts to cut their annual profits forecasts for the business.
The continued struggles in the GM division come more than a year after Mr Bolland began a reshuffle of the brand’s key fashion executives.
The changes were expected to bear fruit with the current autumn/winter fashion range which was promoted by stars including Oscar winner Dame Helen Mirren.
However, the marketing push failed to inspire shoppers and sales declined further than in the previous quarter, when they fell 1.3%.
In contrast, the high street stalwart’s food offering continued to perform strongly, with like-for-like sales in the 13 weeks to December 28 up 1.6% against a tough comparator period in 2012.
M&S said the food division’s performance meant that overall group-wide margins would be broadly level year-on-year.
“An exceptionally unseasonable October, which saw GM sales down strongly, has resulted in a quarterly performance below our expectations,” Mr Bolland said.
“Our food business had an excellent quarter, with 4.1% growth and record sales over the Christmas period, including our biggest day ever in food of £64 million on December 23.
“M&S.com also had a great quarter with sales up 23%, strongly ahead of the market.”
Analyst Freddie George, of Cantor Fitzgerald, said a turnaround in clothing was still some way off.
He said: “We continue to believe it will take a number of seasons before the existing team is able to manifest a marked improvement in performance.”
Despite the group’s woes, M&S shares which dropped steeply last month on fears over its Christmas performance picked up in morning trading yesterday as investors looked for positives in the group’s performance.
Keith Bowman, equity analyst at stockbrokers Hargreaves Lansdown, said many were simply “breathing a sigh of relief” that the figures were not worse.
“For now, investors are still being asked for patience. Signs of a turnaround for its GM business have emerged, whilst the food business continues to take up the slack,” he said.