There was no good news when Marks & Spencer reported its quarterly numbers last week, with its seventh consecutive fall in sales. The clothing store is not doing very well, and profits have been done for quite a while, but in the phone call to shareholders, CEO Marc Bolland tried to stay positive, and said that he was confident that the firm can be doing better. It says that they also have the full support of its investors and that clients love to shop at their stores.
Marks & Spencer is one of UK’s largest clothing chain and it is under immense pressure to deliver better numbers as the general merchandise division was the main problem area for the brand, being key to their success, but having fallen almost 4% in the last quarter, while their food division went up by 4%.
Overall, their sales were slightly ahead, at 0.6%, but still well under previous estimates. The brand’s sales keep going up, but their costs do as well, and their profits keep slipping lower each time. The CEO’s encouraging words may have done the trick for investors however, since after falling, the company shares went back up by 5% to £403. There has been rumors going around as well, including for Bolland’s departure should a takeover happen, which is seen as being likely.
However, Bolland said to shareholders that he is enjoying the job and finding the challenge refreshing. He said it is hard work, but he will take as long as is needed to bring the company where people want to see it. He added that the brand will improve, and that this quarter is always a challenging one.
James McGregor is a directory at Retail Remedy consultancy and he said that these results should be sufficient to give the company’s CEO a few more months to deliver something better, but that he would have to bring this brand back up or face the ire of shareholders. Improvement is needed in general merchandise performance and it needs to come quickly.
Its annual profits will be reported in May and they are once again expected to go down, just like last year. Profits have been declining for several quarters now, and Bolland still has a long road ahead as it tries to recover. While the food business is going well, changes need to happen elsewhere in the business.