[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Wednesday, 14 January, 2004, 17:12 GMT
M&S director quits as sales dip
Marks & Spencer
The company fears a drop in sales may hit market share
Marks & Spencer's director of clothing is to quit after the retailer announced a bigger-than-expected fall in sales during the Christmas trading period.

Underlying sales of non-food items fell 4.5% in the three months to 10 January, worse than forecasts of a 2.5% drop.

Total clothing sales fell by 3.3% and the retailer announced that clothing director David Norgrove is to leave.

Chief executive Roger Holmes said the performance was "disappointing", with womenswear sales especially poor.

However, despite the slide in sales, M&S said profit margins had been protected.

The company also reported a 0.7% rise in like-for-like food sales - which strip out of the effects of new store openings - during the festive period.

Womenswear disappoints

No replacement was named for Mr Norgrove, who the company said is to leave "in due course".

Until an appointment is made he will remain on the board, focusing on improving supply chain efficiency, the UK's largest clothing retailer said.

Chief executive Roger Holmes said the "disappointing" performance in clothing sales was driven by a weak performance in certain key womenswear areas where the firm's ranges were "not strong enough".

He also added that the warm weather had significant impact.

Mr Holmes warned that he expected the company to have lost market share in clothing during the period.

Market share fears

Given the problems identified with ranges and the loss of customers, he could not guarantee an instant turnaround, he added.

M&S had seen its market share recover to around 11%, after falling to 10% from 13% in the late 1990s, but has not seen any gains in the past nine months.

Rival retailer Next reported better-than-expected sales growth during the Christmas period - sparking increasing speculation that customers are deserting M&S.

Mr Holmes added he would be looking to home furnishings, food and financial services to drive future sales growth.

Despite the bad news, shares in M&S closed up 2p at 276.25p.

Stock clearance

Meanwhile, discount clothing retailer Matalan said it had a disappointing Christmas, with like-for-like sales down 5%.

The group said it experienced difficult trading conditions in the Christmas approach, and began discounting before the holiday.

Total sales in the five weeks to 10 January were up 5.5% against 15.6% last year, while the 5% fall in like-for-likes contrasted with a rise of 1% previously.

The group said that despite an earlier and heavier level of price-cutting than last year, stock clearance had been unsatisfactory, and extra clearance activity would be needed.

The BBC's Jenny Scott
"Those in the fashion business say M&S didn't get their basic fashion right"

M&S 'hit by weak Christmas sales'
21 Dec 03  |  Business
Matalan spreads Christmas gloom
11 Dec 03  |  Business
Weakest retail sales since summer
18 Dec 03  |  Business
M&S sees profits rise
04 Nov 03  |  Business

The BBC is not responsible for the content of external internet sites


News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific