M&S sees growth in online clothing sales in first half

Further, M&S has also reduced the price of hundreds of everyday lines, including £15 men’s chinos, which generated an increase in sales of 8 per cent. The sales were held back by weakness in areas such as tops and in kids' daywear where range improvement is needed.

During the reported period, the UK-based company's website and online fulfilment capability remained well behind the best of its competitors.  However, very early steps to improve its website helped deliver growth in the online Clothing & Home segment. Technology and supply chain resilience remained an issue but despite this 20.4 per cent of UK Clothing & Home sales are now online as compared with 18.2 per cent in the first half of previous year.

In Clothing & Home, stock carrying levels remained at c.20 weeks and availability was also unsatisfactory. Supply chain and store operating costs were impacted by the complexity of stock handling and the volume of slow-moving lines. The initial assessment of Clothing & Home 'Fuse' has been promising, with significant reduction in stock and cost to operate. In physical distribution, M&S is on track to open a further national distribution centre at Welham Green next spring and this will allow them to increase single tier network coverage to c.85 per cent.

"In May I set out in our 'Facing the Facts' presentation, the challenges we face and the steps we are taking in this the first phase of our transformation programme. Against the background of profound structural change in our industry, we are leaving no stone unturned and reshaping our business, its organisation and culture," Steve Rowe, chief executive officer, said.

"This phase is about rebuilding the foundations of the future M&S and we are judging progress as much by the pace of change as the trading outcomes. Already, we have reorganised into a family of strong businesses in the biggest change to our structure for decades. We now have a largely new, very determined and energetic management team in place. M&S is becoming a faster, more commercial and more digital business," added Rowe.

For fiscal 2019, trading conditions are expected to remain challenging and the headwinds from the growth of online competition and the march of the discounters remain strong in M&S markets. In Clothing & Home, M&S expects a space reduction of around 4 per cent (previously 5%) as at year end. Capital expenditure is likely to remain under tight control and is projected to be between £300-350 million before disposals (previously £350-£400m).

"We are on track to restructure our store portfolio with over 100 full-line closures and expect to see newly remodelled stores open next year. We are fixing the basics of our online channel and there are very early signs of improvement. Every aspect of our ranges, how we trade, our supply chain and marketing is undergoing scrutiny and change," concluded Rowe. (RR)

Fibre2Fashion News Desk – India