M&S sales continue downward slide

Clothing sales have continued to unravel at M&S

Sales at Marks & Spencer fell for the seventh quarter in a row, the company announced.

Like-for-like sales slipped 5.4% in the 14 weeks to 9 July, after a 6.3% fall in the previous three months and a 5.1% fall for the year.

Clothing sales fell 9.2% though food sales did pick up a "pleasing" 0.7%.

Investors are angry at chief executive Stuart Rose's failure to turn the business around, one year after the firm turned down Philip Green's offer.

Falling clothing sales pushed turnover 11.2% lower during the period.

"The trading environment continues to be very tough," chief executive Stuart Rose said, but he did add that margin and cost targets remain unchanged.

Shareholders gathered this afternoon for the firm's annual general meeting.

'Wrong price'

Robin Geffen, chief investment officer at Neptune Investment Management, said Mr Rose had failed to resolve supply chain problems which were continuing to squeeze margins at the group.

[Mr Rose] has got six months, the City won't tolerate continued falling sales, crushed margins and underutilised assets Robin Geffen, Neptune Investment Management Check M&S's share price Retailers face investors

He added that 11 of the 15 producers supplying M&S in 1997 - when its share price was £6.70 - are still providing it with goods despite the availability of cheaper Chinese textiles.

"[Mr Rose] has got six months, the City won't tolerate continued falling sales, crushed margins and underutilised assets," Mr Geffen told BBC Radio 4's Today programme.

"These shares should be worth £4.75, they're worth £3.60 and we could have had £4 a year ago."

The results come as the group gears up for its annual general meeting later on Wednesday, 12 months after the group turned down a £4-a- share takeover offer from retail entrepreneur Philip Green.

Shares in the firm have remained well below that level since then.

Sales battle

The group has continued to struggle on the High Street, and in May revealed that annual pre-tax pre-exceptional profits fell 19% to £618.5m ($1.13bn) from £805m last year.

Mr Rose is trying to refocus the business on core strengths of product quality and value for money.

His strategy rests on improving efficiency rather than on driving sales.

The firm insists that these efforts have had some success. It said it is carrying 40% less stock than last year, enabling it to delay its summer sale by 18 days and sell more goods at full price.