Marks and Spencer looked as if it had returned to the bad old days of disappointing this morning after the UK retailer reported weaker-than-expected fourth-quarter sales.
M&S confirmed suspicions that its recovery plan had been thrown off course as the retailer reported a 5.2 per cent fall in like-for-like non-food sales in the 11 weeks to March 27th, much worse than the 2.4 per cent fall that some analysts had predicted.
Food fared a little better, with like-for-like sales dipping by 1.4 per cent.
Despite promising that strong control of costs would offset the disappointing sales, Mr Roger Holmes, chief executive, admitted that the performance left little to be pleased with. "Sales this quarter are clearly not good enough," he said.
Mr Holmes said that the group was, however, taking action on a number of fronts to transform the business, as underlying clothing sales for the quarter fell by 1 per cent.
M&S has already signalled a dramatic change in its clothing business after it handed responsibility for the division to Vittorio Radice, also head of home furnishings, and former Selfridges boss.
The group is also lowering prices on some of its key womenswear products and increasing its ranges.
The disappointing sales come in the wake of the group announcing 1,000 job cuts in its head office and financial services arm over the next two years.
Some analysts, however, praised the job cuts saying that they would help to reduce the bureaucracy that M&S is famous for, making the company nimbler and more competitive.
The job cuts are expected to save £25 million sterling a year.
In early morning trade M&S shares were down 10¼p, or nearly 4 per cent, at 266¼p at their lowest level of the year. During the last twelve months the shares have fallen 3.7 per cent, while the FTSE 100 has gained 17.3 per cent
(Financial Times service)