Jumat, 06 Juli 2012

High Street braced for Marks & Spencer to lose its spark

High Street braced for Marks & Spencer to lose its spark

By Rupert Steiner

PUBLISHED: 15:59 EST, 6 July 2012 | UPDATED: 15:59 EST, 6 July 2012

A double whammy of bad news is expected to dent first quarter sales at Marks Spencer.

The washout summer and fears its crucial womenswear ranges have fallen foul of the fashion police are likely to put the retail bellwether’s chief executive Marc Bolland under intense pressure.

The Dutchman is set to update on sales on Tuesday as he faces shareholders at the firm’s annual meeting.

Marks Spencer: Washed out results?

Britain’s biggest clothing retailer is expected to reveal its worst quarterly trading performance for more than three years as the wet April and June kept shoppers at home.

But Bolland’s biggest headache will be women’s fashion. Overseen by general merchandise director Kate Bostock, who has been constantly linked to speculation she wants to jump ship but never takes the plunge, it is expected to have been worst hit. The firm (down 11.20p to 318p), which has 700 stores, will have also suffered because its homewear ranges are underdeveloped and its move to introduce exclusive beauty products will take time to establish.

Analysts expect underlying sales to be down 2.7 per cent hit mainly by a 7pc slump in general merchandise â€" partially offset by a 1 per cent rise in food sales after being boosted by the diamond jubilee celebrations.

Jamie Merriman, an analyst at broker Bernstein Research, said market share data shows that the company has experienced consecutive periods of underlying decline in 2012, the first since May 2009.

‘We believe this decline is significant, particularly the decline in the womenswear division,’ he said. ‘MS’s share of the womenswear market has declined for five consecutive periods; as womenswear represents more than 60pc of MS’s general merchandise and 56 per cent of the total market, any share declines in this category will have significant knock-on effect on overall sales.’

Bolland and the board are also set to face tough questions over pay at the annual meeting after shareholder body Pirc labelled its bonus plans ‘excessive’. Pirc has advised investors to abstain from voting for the remuneration report for the year to April in protest at awards, which include £2m for Bolland.

Pirc said awards made last year were ‘excessive’ at twice the level of salaries, despite the retailer reporting its first drop in profits for three years.

Its update will come in the same week as budget chain Primark and online fashion firm ASOS also report.

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