Commentary on M&S Q4 2015 trading figures by Julie Palmer on BBC Radio 5 Live
Begbies Traynor regional managing partner and retail expert Julie Palmer was in the BBC Radio 5 Live studio this morning to discuss the latest trading figures from Marks & Spencer.
The figures have proved disappointing with a sizeable 5.8% drop in general merchandise sales for Q4 2015, including the Christmas period, triggering the decision from CEO Marc Bolland to step down in April.
M&S food sales were, once again, very strong representing the firm's best ever Christmas figures but it is the company's clothing division that warrants cause for concern.
Julie Palmer, interviewed by Adam Parsons on BBC Radio 5 Live, said:
"It's a big fall; around the same level as last year when M&S had huge problems with its distribution centre and despite resolving these issues and improving their online platform, they are still experiencing this like-for-like drop which is extremely disappointing and well below analyst expectations.
"I wonder if the timing of Marc Bolland's decision to step down is a strategic attempt to dampen the disappointment of these trading figures.
"Incumbent CEO Steve Rowe now faces a very big challenge. He comes in on the back of another set of disappointing results and despite his experience within the M&S food division, he is relatively inexperienced in clothing and that's the division that's really suffering.
"M&S is almost trying to reposition its place in the hearts and minds of UK consumers; everybody loves M&S but nobody seems to be 'in love' with M&S anymore and the women's clothing division is definitely a concern for them.
"It could be said that M&S is still trying to be 'too many things to too many people'. The food division continues to do extremely well in a challenging food retail market. The problem however with M&S is that it gives the impression it's a middle class, middle-aged store. They've tried to arrest this train of thought through their advertising campaign with Alexa Chung to capture the interest of a younger demographic but it isn't really working for them.
"The challenge for them is that they need to keep their existing customer base, i.e. the slightly older middle class crowd, but equally to go for the higher margins they need to capture the younger shoppers as well and M&S is caught a little bit betwixt and between at the moment."
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