News that Marks & Spencer has reported record Christmas trading will inevitably spark debate over whether the much-loved retailer’s oft-promised turnaround has finally been accomplished.
Today’s movement in M&S shares, which at one point fell by 6%, suggest there is still scepticism among some investors.
Yet the numbers themselves are pretty encouraging.
Not so much the 18.5% rise in group sales, to £3.27bn, during the 13 weeks to New Year’s Day.
Many M&S outlets were closed during the same period in 2020 and so it was not too much of a stretch for the business to improve on that performance.
It’s not even, for the same reason, the spectacular-looking 37.7% rise, on the same period last year, in UK clothing and home sales to £1.08bn.
No, the real stand-out number in today’s trading update is the more modest-looking 3.2% rise in UK clothing and home sales on the same period two years ago in the pre-pandemic era.
Most analysts had actually expected a fall.
That provides encouragement that clothing and home, long the problem child for M&S, is enjoying genuine and sustainable growth.
M&S shares fell on the update
Much of that reflects the hard work put into upgrading M&S’s online operation.
M&S was one of the first UK retailers to actually have a website, launching it as long ago as 1998, but that side of the business was de-emphasised in the early 2000s and it lost ground, in particular, to Next.
The company sought to catch up by investing heavily in a giant distribution centre at Castle Donington in Leicestershire, which opened in 2013, but which was blighted for years by inefficiencies.
Steve Rowe, chief executive since 2016 and Archie Norman, who became chairman the following year, made a priority of fixing Castle…
Source : skynews
