M&S sales hit by revamped website

York Press: Marks & Spencer saw three straight years of quarterly declines for the general merchandising division Marks & Spencer saw three straight years of quarterly declines for the general merchandising division

Marks & Spencer heaped more frustration on shareholders today by admitting the flawed launch of its new website had dealt another blow to sales.

Teething problems with the site, including issues with customer registration and navigation, meant online sales were down 8.1% in the 13 weeks to June 28.

Its clothing and homeware division suffered from the disruption as it recorded its 12th quarter in a row of falling underlying sales - down 1.5% on a year ago.

As he prepared to face shareholders at the company's annual meeting at Wembley, c hief executive Marc Bolland offered some encouragement in that womenswear sales were up "slightly" for the second quarter in a row.

He pointed to an 11% rise in sales of its Limited Edition summer range as a sign that last year's hiring of new fashion executives and numerous celebrity-driven marketing pushes were starting to pay off.

The former Morrisons boss added that the firm was simplifying parts of its website, which currently has 3.2 million users, and expects the online arm to be growing again by the retailer's peak trading period which begins in November.

The firm plans to register six million users by the end of the year, which was the number the firm's old website carried.

Chief executive Mr Bolland said: "We have seen a continued improvement in clothing, although as anticipated the settling in of the new M&S.com site has had an impact on sales."

Around 16% of its general merchandise sales came through its website.

In M&S food halls, the department outperformed a market beset by supermarket price wars as it grew like-for-like sales by 1.7%. The group's total revenues for the period improved 2.3%.

Profits have fallen for three years in a row and have just been overtaken by rival Next, although M&S is on track to meet City forecasts for a 2014-15 pre-tax profit of £663 million, up from £623 million in 2013-14.

Parts of the City were surprised that, given the troubled start to the new website, the firm's online executive director Laura Wade-Gery was last week promoted to take charge of its 800 UK high street stores.

Analysts at Shore Capital said her performance had been "pretty mediocre" and that her time might be "more effectively spent sorting out dot.com".

Shares were slightly higher today, with analysts divided over whether Mr Bolland, who joined the business in 2010, has begun to revive the retailer.

Edison Investment Research analyst Neil Shah said: "With food continuing to outperform the market, a resurgent clothing offering helping to turn the corner for general merchandise, M&S is on course to deliver one of its better all-round performances for several years."

But analysts at Shore Capital added: "Overall, we deem this to be another disappointing update from the company, with general merchandising in the UK continuing to weigh heavily upon the group's growth prospects."

Keith Bowman, equity analyst at Hargreaves Lansdown stockbrokers, said: " For now, M&S remains a work in progress" and that Mr Bolland "is still being given the benefit of the doubt" by the City.

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