M&S figures 'too close to call'
Next overtaking M&S in crucial womenswear sales
Next sales have soared above £4 billion while this week M&S is likely to reveal figures showing it slipped back below the threshold.
After 15 consecutive quarters of falling clothing sales chief executive Marc Bolland is under severe pressure to report at least a flattening of sales in its latest trading period.
Some analysts believe it may just surprise the City with better than expected figures.
Brewin Dolphin’s Nicla Di Palma, says: “The key issue remains on when like-for-like sales in General Merchandise [which includes womenswear] will turn positive, which might be later than some investors might expect.”
A positive result would provide some breathing space for the Dutchman who has been given the benefit of the doubt since joining the company in 2010. He has consistently failed to stop the rot despite spending millions on celebrity marketing campaigns and introducing high-profile executives to the board.
He has also blamed a lot of factors, including unseasonal weather and latterly the failure of the group’s warehouse to cope with Christmas orders.
This caused disruption to online orders and while the company will say this week that these problems have been fixed, some say shoppers remain dissatisfied.
Annual profits have fallen for three years in a row and Next is poised to overtake M&’s core clothing and home business for the first time after years of rapid growth under the leadership of chief executive Lord Wolfson.
However, the City expects M&S to improve profits in the current year to £641 million from the £623m in the previous year.
Last month the retailer said it would close five stores in China and shrink its Shanghai head office as part of a strategic shake-up, which would see the number of sites in the country fall from 15 to 10.
Its joint broker, Citi, is saying sales in general merchandise – which includes womenswear – will be flat, bringing an end to four years of decline.
But because of the third quarter disappointment, the second half will still show a fall in like-for-like sales. The consensus is for a 1.2% sale for the second half, with food sales again up, by 0.3%.