Like-for-like sales in the important general merchandise division were down 5.8% for the 13 weeks ending 26 December. The festive performance represents M&S’s worst ever performance in the category and is a steeper drop than city expectations of a 5.5% fall.
Bolland will be succeeded by Steve Rowe, who was most recently made head of general merchandise and has been with the retailer for more than 26 years in various roles across areas such as ecommerce and food.
The departing CEO will remain in position until 2 April and “be available to Steve and the board to assist in the transition until 30 June”.
Reflecting on his departure, Bolland said in a media briefing this morning: “I believe I’ve put the building blocks in place for Steve to really take this business forward.
“General merchandise is much stronger and margins are looking better. In terms of style, quality, design, online and marketing, we’re now stronger than we’ve ever been at M&S.”
In his six years at M&S, Bolland has moved to bring food and fashion closer together within brand marketing.
He has also overseen a switch to a more digital savvy approach, with the 2015 M&S Christmas campaign mobile-first and focused on mobile orientated ‘bite-size moments’.
For the first half of 2015, M&S revealed that its marketing investment was up 4.7% to £86.9m and insisted the investment was strengthening sales.
Poor fashion against strong food
Bolland cited unseasonal conditions and availability issues for the poor GM performance, which was in sharp comparison to its thriving food category. M&S food sales had their best ever Christmas for the brand with a 3.7% lift in total sales and 0.4% like-for-like growth.
Food remains the jewel in Bolland’s crown, with the festive performance on groceries significantly better than close rival Waitrose, which revealed a 1.4% decline in sales yesterday (6 January)
Rounding off the results, M&S says online sales were up 20.9% over the festive period and that its Sparks loyalty card has hit 3.3m members since launching 11 weeks ago.
According to Bolland, M&S fashion was hit by the “unprecedented levels of promotional activity in the market, starting from Black Friday”.
He explained: “Retailers should turn their back on Black Friday. It has not done British retail very good to just put things out at half price and it isn’t having an overall positive effect on the overall profitability of British retailers.”
‘Jumping before he was pushed’
John Ibbotson, director of retail consultancy Retail Vision, believes Bolland has “jumped before he was pushed” as a result of failing to turnaround the GM business during his tenure.
“M&S’s clothing is now a fallen colossus,” he said. “Years of long-term decline have seen it lose both its identity and market share, and the decision to sacrifice quality in order to cut costs has proved toxic for the brand’s core-middle class customers – who have been deserting in droves.”
New CEO Steve Rowe will have his work cut out turning GM around, according to Retail Remedy’s James McGregor. M&S yesterday confirmed it is to expand its food floor space at the expense of GM across a number of stores nationally.
McGregor adds: “The trial announced to shift the mix of space in M&S stores from fashion to food reflects the change in sales and will improve fashion sales density assuming that ranges are rationalised more effectively. Could this finally be the start of a brand rationalisation too?”