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Marks & Spencer Apparel Sales Down on Holiday Discounts

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The heavily discounted holiday season did not bode well for British retailer Marks & Spencer (M&S) who saw clothing and housewares–which make up its general merchandise division–sales drop for the tenth straight quarter.

In a report released Thursday, the company announced that like-for-like sales in general merchandise were down 2.1% for the thirteen weeks ended December 28. There was a slight improvement in sales for the Christmas season specifically, where M&S held holiday promotions and saw a 0.5% increase for the eight weeks ending December 24.

“We delivered an improved performance in General Merchandise over the important Christmas period,” M&S chief executive Marc Bolland said. “However, an exceptionally unseasonal October, which saw GM sales down strongly, has resulted in a quarterly performance below our expectations,” he added.

The UK saw three of the wettest months on record at the start of the fiscal year and experienced the coldest March in more than 50 years in 2013. As a result, footfall, or store visits were down 3.7%, according to the company’s 2013 Annual Report.

M&S said clothing sales were less than satisfactory over the last year and, in the last quarter specifically, things have been challenging where general merchandise is concerned, with the unseasonal conditions and higher than ever levels of discounting. The retailer tried to retain full-price sales for as long as possible, but as the level of discounting increased across the marketplace leading up to Christmas, M&S had little choice than to respond with its own promotions.

General merchandise sales at M&S.com however, were up 32 percent over the eight-week Christmas season with customers increasingly turning to mobile sales, with orders from tablets up 100 percent over last year and mobile phone orders up more than 80 percent.

John Dixon, M&S executive director of general merchandise said, “This year we took decisive action to address the performance of our General Merchandise business; bringing in a new team, listening carefully to our customers and improving our operational execution. This action, coupled with a renewed focus on quality and style, resulted in early signs of improvement towards the end of the year.”

The womenswear business saw those early signs of improvement showing market share growth for the first time in three years. The company said it delivered a good performance across key categories including coats, dresses and footwear and managed stocks tightly resulting in a clean position at the end of the quarter.

“We have a clear plan to address our performance, with a renewed commitment to quality and style. These improvements are reflected in our upcoming Autumn/Winter collections and our progress will continue step by step,” the annual report noted.

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