M&S to reveal slide in profits

Marks & SpencerMarks & Spencer boss Marc Bolland will come under pressure today as he reveals a slide in profits at the high-street bellwether following its worst non-food sales for more than three years.

The UK's biggest fashion retailer posted a 6.8% fall in non-food like-for-like sales in the 13 weeks to June 30 after it admitted it had lost market share in its core womenswear market.
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The performance led to the departure of former head of general merchandise Kate Bostock, while former Debenhams and Jaeger boss Belinda Earl was tasked with revitalising womenswear in the newly created role of style director.

The company announced a further reshuffle yesterday as Annette Browne, former womenswear trading director stepped down from her role with immediate effect, while lingerie and beauty head Frances Russell was promoted to womenswear director.

Most retail experts are expecting a better second quarter thanks to improved market conditions, pencilling in a decline of 2.5% for general merchandise and 1.5% gain in food sales.

But analysts believe the improvement will not be enough to halt a hefty profits decline, with expectations for first-half pre-tax profits to drop by 11% to £280 million.

It is also unclear how much of the non-food improvement is down to internal efforts, with recent UK retail sales figures showing a bounce back in consumer spending across the high street in September and October thanks to falling inflation.

Marks blamed the first-quarter performance on wet weather and a shortage of some of its most popular lines and stressed that it was taking the necessary action to turn sales around by improving buying and merchandising.

The plunge in non-food sales dragged overall first quarter like-for-like sales down by 2.8% as it offset a 0.6% increase in food sales.

In an analyst note, brokers Societe Generale said: "We anticipate better sale trends over the coming quarters, due to a combination of rising UK disposable income, self-help through store refurbishment, soft prior year comparatives and - further out - product and availability improvements."
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