Marks & Spencer lost £270 million market value as stocks fell by 4.5% to 353p, after leaked quarterly results showed 1.8% fall in overall sales for the 13 weeks to 29 December, in contrast to Christmas sales of competitors such as John Lewis and Next. The leaked results piled pressure on M&S CEO Mark Bollard who was too late in tending to the damage which was already done. Mark Bollard clarified that Marks & Spencer had not issued a profit warning in an emergency conference call last night.
The M&S CEO admitted that business in non-food category was not yet satisfactory but pointed out that the group had decided to protect margins by reducing the level of promotions and keeping more stock at full prices. Mark Bollard said the new management team needed more time to address the revival plan, which will take effect only in July with the launch of autumn-winter collection.
City analysts fear that time is running out for Mark Bollard as he procrastinates a turnaround for Marks & Spencer, particularly when the retailer is pouring in money on makeover of the M&S stores. Shore Capital analyst Clive Black said, “It is clear that pressure is rising on the new management with respect to the nature and performance of forthcoming spring and summer clothing ranges at M&S in the UK, and an improvement in relative and absolute terms is necessary for shareholders’ confidence to be bolstered.”
Marks & Spencer’s poor Christmas trading results come in contrast to other retail giants Next and John Lewis, which reported strong sales growth over the Christmas period. General merchandise sales at M&S slid by 3.8% in the last 13 weeks of 2012, while the 0.3% rise in food sales also missed forecasts. M&S predicted a cautious year ahead, while expecting to see continued pressure on consumers’ disposable incomes.