Marks & Spencer share price slides as clothing sales plunge

Shares in Marks & Spencer Group (LON:MKS) have fallen deep into the red in today’s session, missing out on the broader market rally, with the blue-chip retailer posting a slump in its clothing sales in the first quarter. The company, which has been struggling to revive its general merchandise division, further noted that it was still too early to quantify the impact of last month’s Brexit vote on its business.

As of 10:11 BST, Marks & Spencer’s share price had dipped 2.11 percent to 287.90p, significantly underperforming the benchmark FTSE 100 index which has spiked 1.47 percent to stand at 6,558.77 points. The group’s shares have lost more than 46 percent of their value over the past year, and are down by some 36 percent in the year-to-date.
Marks & Spencer announced in a statement this morning that group sales had inched 0.2 percent higher at constant currency in the 13 weeks to July 2. The company’s performance was dragged down by clothing and home sales which fell by 8.9 percent on a like-for-like basis. The group’s food sales meanwhile came in 0.9 percent lower, further pressuring M&S’ UK sales which declined by 4.3 percent.

The group’s new chief executive Steve Rowe attributed the decline in the retailer’s home and clothing sales to lower prices and fewer promotions, part of his revival strategy.
“These are not the numbers I want to see but they are the numbers I expected to see,” he pointed out, as quoted by the Guardian, adding that the blue-chip group’s clothing prices had been too high and too promotional, fuelling a damaging cycle that meant shoppers had become trained to wait for sales before buying anything.
He further commented that consumer confidence had weakened in the run-up to the EU referendum, and said that it was “too early to quantify the implications of Brexit”.
“There is no hiding from the fact that both the overall market and M&S’ performance have been soggy at best in the first quarter,” the Guardian quoted Canaccord Genuity analyst David Jeary as saying.
Despite the downbeat numbers, Marks & Spencer said that its full-year guidance remained unchanged, with the group due to update the market on its strategy in November, along with its interim results.
As of 10:28 BST, Thursday, 07 July, Marks and Spencer Group Plc share price is 289.75p.