M&S clothing sales hit Christmas high after years of pain

Marks and Spencer’s share of the UK clothing market reached its highest level in almost eight years after a robust Christmas period, fuelling hopes its years-long restructuring is paying off.

Clothing and home sales grew 8.6 per cent on a like-for-like basis and 8.8 per cent in total during the 13 weeks to December 31, substantially above the 4.5 per cent forecast by analysts at Deutsche Bank.

That took the retailer’s clothing market share back above 10 per cent, according to Kantar data for the 12 weeks to December 11.

Part of the increase was driven by the ending of Covid restrictions, which were still in force during the same quarter a year ago. This boosted shopper numbers in stores and sales in areas where M&S is traditionally strong, such as formalwear and party outfits.

But chief executive Stuart Machin said growth was broad based. “Every business within clothing grew ahead of the market,” he said, citing gains in knitwear, denim and coats. “The value perception remains strong as does the style perception”.

That is a contrast to previous years, during which clothing has been a recurrent challenge for M&S as progress in one area has often been offset by problems such as product shortages or poor sizing in others. M&S’s UK clothing and home sales declined every year from 2011 through to 2020 before staging a small recovery against pre-pandemic levels in 2022.

Machin added that a large proportion of M&S clothing sales were in less discretionary areas such as school wear and underwear, where spending was more resilient. A sharp cold snap at the start of December also boosted sales of thermal wear.

Clothing sales in-store grew 12 per cent and although the improvement partly reflected prior year disruption from the Omicron Covid variant, M&S is talking with growing confidence about its store rotation programme.

The company is refitting what it terms “mainline” stores in town and city centres while closing older less productive outlets and replacing them with purpose-built units in retail parks.

Machin cited the example of Colchester, where a new out-of-town store traded 25 per cent ahead of plan in clothing and homewares. Other new-generation stores, including Chesterfield, Harrogate, Stevenage and London Colney near St Albans, have also traded strongly even though in many cases the proportion of floor area devoted to clothing has in fact fallen.

Online sales growth shrivelled to just 0.7 per cent in the quarter, from 2.3 per cent in the same period a year ago, but Deutsche Bank’s Adam Cochrane said this was still ahead of the wider market. Machin stressed the company still intended to take online clothing sales to half of the total, against about a third at present.

M&S’s ecommerce offering now includes a selection of third-party brands such as Seasalt, Nobody’s Child, Dune and Hobbs, which account for about 8 per cent of the total. “We have set a target of £400mn of sales from third-party brands but we think that long term there is a much bigger opportunity than that,” said Machin.

Including food, UK same-store sales were up 7.2 per cent and total group sales were 9.9 per cent ahead of last year, although as for all retailers higher prices played a significant part in that growth.

Shares in the group, which have rallied around 50 per cent from their October lows, were down slightly in midday trade.