M&S Christmas Clothing Sales Fall 2.1%
Extended pre-Christmas discounting by Marks & Spencer has failed to spark sales growth in the company's troubled clothing lines.
M&S confirmed to the City that it had suffered its tenth consecutive quarter of falling sales in its general merchandise division, which also includes gifts and homeware, dropping 2.1% on a like-for-like basis in the eight weeks to December 24.
The group admitted that a series of discounts to drive seasonal sales - which included a pre-Christmas "Mega Day" with reductions of up to 30% on clothing lines - would hit profit margins when full-year results are reported later this year.
Total UK sales fell by 0.2% over the same period on a like-for-like basis - with its popular food offering propping up its performance with growth of 1.6%.
In the quarter ending December 28, total sales rose by 1.5%.
Chief executive Marc Bolland said: "We delivered an improved performance in General Merchandise over the important Christmas period, with sales up 1.5% in a highly promotional market.
"However, an exceptionally unseasonal October, which saw General Merchandise sales down strongly, has resulted in a quarterly performance below our expectations."
He has insisted its approach to revamping its clothing offering is working but taking time - with womenswear showing particular improvement so far.
Nevertheless, the sales slump was worse than expected and poorer than the previous quarter's performance, when M&S posted a 1.3% decline in UK like-for-like sales.
Mr Bolland, who insists that major shareholders understand the step-by-step nature of his reforms to boost trade, began a reshuffle of the brand's key fashion executives more than a year ago.
The launch of its Autumn collection heralded the start of its new approach to clothing.
M&S said its food saw record sales over the Christmas period, with the biggest day coming on December 23 when £64m was spent by customers.
Mr Bolland said growth in online sales of 23% was "strongly ahead of the market".
The company's share price fell 1.7% in the first few minutes of trading when the FTSE 100 opened for business but later recovered - up by more than 3% in mid-morning trade.
The reversal followed comments by the M&S chief financial officer, Alan Stewart, who told reporters that the executive team, led by Mr Bolland, retained the backing of the board and investors despite the performance in clothing.
In a conference call with journalists he said: "The board is behind us and behind the strategy and the shareholders are behind us and behind the strategy."
He declined to put a time frame on when M&S would return to positive like-for-like sales growth in general merchandise.
"The step by step approach is what we've spoken about and I think that's the way in which we're going to be measured and the way that we look at it," he said.
:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.