Page last updated at 16:01 GMT, Tuesday, 11 October 2005 17:01 UK

M&S sales rise but Davies resigns

M&S store
M&S has grown sales in a tough trading environment

Marks & Spencer has turned around its falling sales, announcing a rise for the first time in nearly two years.

The retailer said like-for-like sales for the 12 weeks to 1 October were up 1.3% compared with a fall of 5.4% in the previous quarter.

Sales of clothing stabilised, and food sales showed a healthy increase.

But later in the day the good news was somewhat dampened by an announcement that George Davies, consultant to the firm's Per Una business, had resigned.

In a statement M&S said that Mr Davies had a 12 month notice period "and will remain committed to the Per Una business for that period to ensure an orderly transition".

Per Una has been one of the biggest areas of sales growth for M&S sales. As well as Mr Davies, the division's finance director Andrea White and head of merchandising Melanie Davies also resigned.

Shares in M&S closed the day up 3.45% to 397.25 pence. They had closed at 384p on Monday evening.

'Much to be done'

Earlier in the day M&S had been celebrating its first quarterly rise in sales following seven straight quarters of falling sales.

"This is an encouraging performance, but there remains much to be done," said chief executive Stuart Rose.

He warned that the trading environment remained difficult ahead of the crucial Christmas period, but was confident M&S "would deliver".

Mr Rose said it was too early to say that M&S was "calling the turn", and added: "If we get to January with similar numbers I might be prepared to go there."

The latest figures are being seen as the first set to be the full responsibility of chief executive Stuart Rose, as they are a reflection of his ideas and sales lines, rather than those of the previous management.

Stuart Rose
I am confident that this business is getting better
Stuart Rose, M&S chief executive


"He has done extremely well, let's not take that away from him," said Richard Ratner, head of equities at analysts Seymour Pierce.

Total group sales were up 3.3%, with same-store sales in general merchandise - clothing and homewares - down just 0.2% against an 11.2% decline in the first-quarter. Same-store food sales were up 2.7%.

The company said that profits for the first half would be at the top end of market expectations.

However, Mr Ratner warned: "He is going to find it hard to push profits ahead, we see a lid of 800m."

He said Mr Rose had concentrated on turning round food offerings, concentrating on cutting costs, and getting a better control on stock so that there were fewer price markdowns.

'Difficult market'

Mr Rose told the BBC Radio 4's Today programme that with regard to clothing sales M&S was making "progress in a very difficult market".

All Stuart Rose has to do now is go on and produce an excellent six months in a row
Robin Geffen, Neptune Investment Management

"It is very difficult to predict clothing sales, but I am confident that this business is getting better, consumers have fabulous value and great styling coming though," he said.

He said the company was listening to customers and giving them what they wanted.

And he added that there had also been positive feedback from within the fashion business for the firm's autumn clothing lines.

Rebecca McClellan, retail analyst at Exane securities, said: "Their efforts to focus on the core older customer have clearly borne fruit, that's a customer group that is a lot less recession-exposed.

"They've been on a mission to de-crowd the stores and the advertising has been good, too."

Marks & Spencer share price

The BBC's Business Editor Jeff Randall said it was a "good" rather than "great" performance.

"Stuart Rose points out it is a difficult trading environment... if you can force up sales in that environment then you are doing well."

Last year, retail entrepreneur and Bhs-owner Philip Green offered 400p a share for M&S before he dropped his 9.1bn attempted takeover.

What do think of Marks and Spencer? Has the brand now turned a corner? Send us your comments.

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The following comments reflect the opinions we have received so far:

The problem with M&S is that it has never been able to shake off its reputation as a store for middle to upper class clients. Their 'new' clothing range still has nothing for the under 30s and their stores lack a modern feel that would draw in this vital youth customer base.
Dave Hudson, Lancaster

It would be nice if they had kept some classics such as ladies blazers instead of all the modern-type jackets and had some classics for the mature and rounder lady rather than long stuff for the tall and thin. The more mature lady has to now go away from M&S as they are not catered for. Per Una is not for them.
Susan Beeston, Rainham, Kent

The up-turn in M&S clothing sales is all down to me!! I have never bought so many M&S items of clothing. The Per Una range is currently better than Next (my normal first choice), Oasis and Mexx. I just wish each store would carry only a maximum of two items per size in any item, the downside is seeing someone else in the same outfit.
Rosemary Cain, Halifax

I think the M&S brand has not fully turned the corner yet but is an encouraging amount of the way there. I increasingly find that M&S clothing is highly superior in quality to the vast majority of comparable competitors. I hope it does well.
Alan Parkinson, Oxford

I love M&S clothes but the price for one skirt - 35 on average - to me is still too high. I work for the NHS are we are in the process of having our pay cut due to Agenda for Change, so what chance do I have of buying M&S clothes?
Veronica Ward, Bristol

I love M&S and was very upset when they pulled out of France. I often order over the internet but I find it's very hit and miss regarding the descriptions of the clothes and accessories: they don't give measurements (eg, the length of a top, which is quite important, depending what you want to wear it with), and the descriptions are often very badly written: I remember one particular pair of trousers being described as "so comfy" - enough to put any potential buyer off, I would have thought! Another problem is that they don't deliver abroad. Personally I get friends and family to send parcels on, but I'm sure M&S are missing out on a lucrative market.
Helen Esther Mundler, Strasbourg, France

I have never failed to find something I like and been able to colour co-ordinate, although for a while the choices I found were more limited. I am pleased to say that this year's autumn ranges are very good indeed. I have two or three outfits from three mix and match items. I never shop anywhere else.
Marion Mort, Nr Southampton

As an M&S devotee, they are certainly not doing enough to reassure their older, (larger), loyal, customer base. I do not want my only choice to be a style more fitting a 20 year old. No blouse ever fits on the arms (carry out a poll on this and see). But do appreciate the 'outstanding value' items.
B Williams, Upminster

An undoubted "yes". A visit a couple of weeks ago to Fosse Park (near Leicester) was an exiting experience with real, new, variety in menswear with superb up-market trousers at over 50 in wool/cashmere and an excellent range of fashionable 'limited edition' suits with a full choice of matching jackets and trousers.
Paul Turner, Coventry

For the first time in ages I actually bought some clothes from M&S that were not in the Per Una range. The stores look less cluttered and mumsy.
Terry Thorpe, Hitchin

The shops are now brighter and better laid out with superb menswear and the food is reasonably priced and of top quality. Marks and Spencer is definitely on the up.
Noel Harris, Newcastle-upon-Tyne

As a slightly unwilling expat where do I head first when I return to the UK but M&S? Glad to see they may have turned the corner. You don't know how lucky you are to have such a shop, particularly in the food department but I also like their clothes. Appreciate!
Carrie Kelly, The Hague, The Netherlands

I've just been to M&S for a few lunch things in my closest town, Accrington. And, as usual, there were queues at every open till. Until they get customer service right, the company doesn't stand a chance of turning the corner.
Andrew Bridge, Haslingden, Lancashire

When M&S start catering better for the 40+ group who have the most disposable income they will then start to see even bigger profits - most shops now look like jumble sales. The one in Warrington Burtonwood is so difficult to walk around as you can't seem to go in a straight line anywhere without bumping into a rail stuffed with clothes.
Janet Nulty, Shrewsbury



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