Investors and analysts were left stunned by Marks & Spencer’s disastrous Christmas, which saw its non-food sales drop more than twice the level expected.
Chief executive Marc Bolland attempted to put a brave face on the warehouse issues and warm weather, which sent general merchandise sales plummeting 5.8% in the 13 weeks to December 27.
But he admitted: “It is difficult and isn’t easy, but we feel we will be able to serve customers much better over time.”
However, the shares slumped 4.5% to 442.2p, as analysts gave a withering verdict to the distribution problems at its Castle Donnington site.
Nicla Di Palma at Brewin Dolphin said: “Overall, we find this statement really disappointing. M&S has invested in new designers and has been trying to improve the appeal of its womenswear collections for a few years now, but not successfully so far. The bad sales performance outweighs the reduction in costs.”
M&S investor Premier Asset Management added: “All the hard work in general merchandise came to nought over the festive period as customers voted with their feet and found better value for money elsewhere. Investors, however, should cut the company some slack as margin improvement guidance is unchanged.”
Its food business also suffered worse than expected, rising just 0.1%, despite analysts predicting a 1% or 2% increase, although it said it had record sales of 17% in the key Christmas week.
But, despite the problems, the firm appeared not to have panicked into heavy festive discounting.
