‘Leading Ladies’ campaign helps M&S post slight improvement in clothing sales

Marks & Spencer’s clothing sales decline slowed in the second quarter, boosted by its new womenswear range and ‘Leading Ladies’ ad campaign, but analysts warn retailer faces a challenge in rebuilding the brand.

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Like-for-like sales at its general merchandise business, which includes clothing and homeware, were down 1.3 per cent, an improvement on the 1.6 per cent decline in Q1. Total group revenues were up 3.8 per cent, boosted by food, international and multichannel sales.

The performance comes after the relaunch of M&S’s autumn/winter clothing collection after two years of sales declines. It was accompanied by a high-profile marketing campaign that featured celebrities such as Ellie Goulding, Dame Helen Mirren and Tracey Emin.

M&S CEO Marc Bolland insists the collection has been “well received” and there are “early signs” of improvement. He adds, however, that the range was only on sale for three weeks of the quarter and therefore did not significantly impact revenues.

More recent figures from Kantar Worldpanel also suggest improvement, with M&S slowing its decline in clothing sales market share. Its share dropped by 0.2 per cent in the 24 weeks to end of September, compared to a 0.5 decline in the previous 24 weeks.

Bolland says M&S is investing in the “long-term transformation” of the business, including the roll out of a new store layout concept for womenswear. These results mark the ninth consecutive quarter of clothing sales declines at M&S, with analysts warning that it will take time to repair the brand.

They caution that M&S needs to be more radical and innovative if it is to regain the ground lost in clothing. It must also make sure it is targeting the right audience with its marketing, with Conlumino dubbing its “Leading Ladies” campaign “schizophrenic and confused”.

Conlumino managing director, Neil Saunders, says: “M&S needs to think more carefully about how the offering is segmented and who each brand, range and collection is appealing to. This is presently unclear. Advertising featuring Grace Coddington, Tracey Emin, Nicola Adams and Ellie Goulding may looking fantastic on a billboard for a movie, but from the point of view of customer targeting it simply comes across as rather schizophrenic and confused.

“M&S has made a start in tackling the problems in its clothing offer, but a great many issues remain and it will take some time – and a lot more focus – before they are fully resolved.”

Food sales were up 3.2 per cent on a like-for-like basis in the second quarter, an improvement on 1.8 per cent growth in Q1. M&S says it continues to focus on quality and innovation, as well as value, with its own brand Simply M&S range growing to account for 11 per cent of its food offering.

International sales increased 7.4 per cent as M&S increased it store numbers to 431 across 53 territories. Multichannel sales were up 27.2 per cent during the period and 55 per cent of orders are now collected in-store or ordered in-store for home delivery.

For the half year, M&S total group sales were up 3.6 per cent to £4.9bn. General merchandise fell 1.5 per cent like-for-like, while food was up 2.5 per cent.

Pre-tax profit fell from £287.3m a year ago to £261.6m in the first half of 2013.

Bolland says the outlook for the retailer for the rest of the year remains unchanged, with M&S “well set up” for Christmas. The retailer launched its new marketing campaign “Magic and Sparkle” yesterday (4 November).

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