Marks and Spencer: Good news finally?
- Published
Marks and Spencer has turned out to be this year's surprise Christmas package.
In a festive season where most of our big retailers did better than expected, M&S stood out, finally shrugging off its clothing sales hoodoo.
Clothing sales have been in decline - and often sharp decline - for the past five years, with the exception of one positive quarter two years ago.
Over Christmas, however, like-for-like sales were up 2.3%, although the company was quick to point out that 1.5% of that was down to how Christmas fell, which meant there were five extra trading days compared to the relevant period a year earlier.
Even so, a 0.8% increase is not to be sneezed at, and is evidence perhaps that the back-to-basics reforms of chief executive Steve Rowe, which include hundreds of job losses at head office and the closure of most of the international stores, is having some effect.
The real test
One good quarter doesn't make a revival, but a halt to the seemingly inexorable decline will give shareholders encouragement.
Retail analysts say Mr Rowe's formula - a concentration on the basics - is a welcome contrast to the recent past, where management introduced eye-catching fashion and made mis-steps online.
The real test will be at the next quarterly update, where the calendar is against Mr Rowe - just as he benefited at Christmas, he misses out next time.
If he can turn in another positive number on clothing, there will be substance to the M&S revival.
Sir Charlie Mayfield, chairman of John Lewis
Elsewhere, there was good news tempered with caution about the coming year.
This was best expressed at the John Lewis Partnership, which reported like for like sales growth of just under 3% at both the department store chain and the grocery business, Waitrose.
Profits for the full year are likely to be up, but Sir Charlie Mayfield, the partnership's chairman, took the unusual step of warning staff their bonuses would be smaller than last year.
The culprits? The pressure caused by a weaker pound and the need to invest heavily in new products.