Page last updated at 10:13 GMT, Wednesday, 30 September 2009 11:13 UK

Marks and Spencer sales improving

Sir Stuart Rose on the in-store policy changes M&S have introduced this year

Sales at Marks and Spencer have stabilised, reflecting an improved performance after a tough 18 months for the retailer.

UK like-for-like sales, which ignore sales at new stores, fell 0.5% for the three months to 26 September.

While this was the eighth quarterly fall in a row, it was better than the 1.4% drop seen in the previous quarter and was at the top end of forecasts.

However, M&S said it remained cautious and predicted 2010 would be "tough".

Steady progress

M&S said like-for-like sales of UK general merchandise - which includes clothes - were down 0.8%. Like-for-like food sales were unchanged, ending eight consecutive quarters of falls.

Total clothing sales increased by 2.7%, in part because of the "successful" launch of a new womenswear range, Indigo, M&S said.

Across the group as a whole, sales growth was up 2.7%, helped by a 30% rise in online sales and a 9.6% increase in international sales.

We expect 2010 to be a tough year and we will continue to run the business accordingly
Sir Stuart Rose, M&S chairman

M&S also said it was hiring 20,000 temporary staff for Christmas.

"We've worked very hard to give our customers better goods and services over the last year or so," Sir Stuart Rose, M&S chairman, told the BBC.

"It's been a tough year for M&S, as it has for the UK, but we're coming through it I hope."

Responding to questions from BBC viewers about the company's decision in April to reduce its returns policy from 95 to 35 days, Sir Stuart said: "A 95-day policy in the 21st century is unsustainable.

"We have to manage our stocks and our business and it's unfair to those customers who bring back items within a short period of time to be penalised by those who do not," he added.

"A 35-day policy is still the best on the High Street."

Sir Stuart also responded to questions about the end of in-store ordering, saying that the old system for ordering had been stopped two to three months ago, but that he was confident it would be replaced by a "new and updated system... in all stores in the next two years".

'Cautious' outlook

Despite the improved performance, Sir Stuart said the company would still be feeling the effects of the recession into next year.

"Whilst consumers appear more confident, we continue to be cautious about the outlook. We expect 2010 to be a tough year and we will continue to run the business accordingly."

M&S has had a difficult 18 months, with sales and profits hit hard by the downturn, forcing the retailer to cut its dividend earlier this year.

However, there was brighter news for the retail sector from the latest consumer confidence survey by GfK/NOP.

This indicated that UK consumer confidence saw its biggest monthly rise for more than 14 years in September, with its confidence index also reaching its highest level since the beginning of 2008.

M&S's strong rise in sales over the internet was echoed in the latest results from online fashion retailer Asos, which reported a 47% increase in sales for the six months to the end of September.

However, it was not all good news on the retail front, with outdoor clothing specialist Blacks Leisure announcing that it is to close 89 stores.

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