M&S Stock Problem Drags UK Sales Down
Marks & Spencer has reported a 0.7% drop in like-for-like UK sales over the first three months of the year after admitting it ran out of stock on some of its best-selling lines of womenswear.
The chain, which operates more than 700 stores in the UK, said non-food sales, which had been expected to return to growth in 2012, were down by 2.8% on a same-store basis.
But like-for-like sales of food were up by 1%, and total group sales rose 0.8% in the 13 weeks to March 31.
M&S chief executive Marc Bolland said problems with its womenswear stock meant that it sold 100,000 items of knitwear in the period, whereas it could have sold three times that many after February's snow stimulated demand.
It could also have sold double the number of "pump" shoes, which proved more popular than expected.
Mr Bolland said: "It's a temporary thing. We were a bit under-bought in some areas.
"That was a miss in our merchandising planning.
"We were bang on-trend but we should have a bit more of some of our lines."
The surprise fall in sales caused M&S shares to fall 3%, even though the UK's largest UK clothing retailer remains on course to meet City profit expectations.
Mr Bolland, said: "We have continued to manage costs tightly, and are confident of delivering full-year profits in line with expectations.
"While the short term trading outlook continues to be challenging, we are focused on investing in line with our plan and are making strong progress against our goal of becoming an international, multi-channel retailer."
Many UK retailers are still struggling as consumers grapple with inflation, muted wage growth and government austerity measures, and worry about job security and a stagnant housing market.
:: Meanwhile, luxury fashion chain Burberry reported an 18% rise in second half sales, driven by strong sales in Britain, France and China.
The seller of raincoats and leather goods reported total revenues of £1.027bn for the six months to the end of March.
The company said that the outlook for the rest of the year was also good.
:: Another firm posting strong results on Tuesday was machinery giant JCB, which revealed record annual sales and profits.
It reported a 37% rise in turnover to £2.75bn in 2011 while underlying earnings hit £355m, up from £235m in 2010.
The company said machine sales rose to 69,100 units last year, up from 51,600 the previous year as it continued to pump cash into its 22 factories worldwide.