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Marks & Spencer Blames Clothing Sales Slump on Fewer Promotions

The British retail chain on Thursday released trading results for the 13 weeks ended July 2, revealing that reduced promotions had an adverse effect on sales in the clothing and home division. Like-for-likes declined 8.9% in the first quarter, resulting in a year-over-year drop of 8.3%.

An early Easter played a part in that sales decline, too. Marks & Spencer said it impacted clothing and home sales growth by 0.8%.

Even a collaboration with “It” girl Alexa Chung hasn’t helped matters. Twenty-four items from the 31-piece Archive collection, released in April, are still available, currently priced online at up to 50 percent off. (By comparison, Chung’s second Madewell line in 2011 was almost sold out within 24 hours.)

“A key part of our recovery plan for clothing and home is lowering prices and reducing promotions. As a result, we ran fewer price promotions while continuing to lower prices to deliver real value to our customers, and moved the summer sale to July. We knew our actions would reduce total sales but we are seeing some encouraging early signs,” said Steve Rowe, the chain’s chief executive since April.

When Rowe took charge he said turning around clothing and home by improving the customer offer was his number one priority. As such, the summer sale began on July 5, two weeks earlier than last year. In addition, the retailer reduced the number of promotional events during the quarter, including just one “cyber day,” down from six last year.

In terms of lowering prices, Marks & Spencer has repriced about 1,000 lines since January and said it’s pleased with early results. For instance, lines repriced in the fourth quarter have seen “strong sales growth,” though the retailer provided no further details.

“Marks and Spencer’s clothing figures are painfully weak and fail to stem the loss of market share to other, more-agile, multichannel competitors,” Richard Lim, chief executive of research consultancy Retail Economics, told the BBC. “Its tireless efforts to revive the struggling clothing business have failed to resonate with its core customer base.”

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