Britain's unseasonably warm autumn weather has taken its toll on Marks & Spencer, with the firm reporting a 13th straight quarterly fall in underlying non-food sales. But as Joel Flynn reports, there was some good news for the 130-year-old group.
Warm weather may have hurt sales but there is - at last - a sunny outlook for Marks and Spencer. Britain's biggest clothing retailer posted a rise in first half profit for the first time in four years. Clothing revenues were still down - partly due to the unseasonable sunshine - but rising food sales and cost cutting made up for it. Now normal weather patterns have returned - many are optimistic, says Robert Cole from Reuters Breakingviews. SOUNDBITE: Reuters Breakingviews Assistant Editor, Robert Cole, saying (English): "The margins of profitability in what they call general merchandise, i.e. clothes and homewares to you and I, have improved noticeably and, the company said today, that it's going to raise its guidance about how much more they will improve in the future. So for every pound that goes through the tills at Marks and Spencer's, more of it is going to drop to the bottom line." M&S shares jumped more than 8% - they'd fallen 17% over the year. The jury though is out on whether chief executive Marc Bolland will deliver the necessary turnaround. He's spent 2.3 billion pounds addressing decades of under-development and clothing sales were still down - for a 13th quarter in a row. The problem it seems is that half of the retailer's customers are reportedly over 55. The latest ranges may have impressed fashionistas but they're not the ones doing much of the buying. SOUNDBITE: Reuters Breakingviews Assistant Editor, Robert Cole, saying (English): "Its glory days in the heart of British retailing, when Marks and Spencer's almost was the British high street are long gone, they won't return, but I do think there's quite a good chance, as long as they think hard about their core customer base, and not to be embarrassed about the fact that older people shop there, because older people have lots of money, and they're living longer. If it can capitalise on that, then I think it has a decent future." M&S still lags rivals in other ways - online sales were down almost 5%. A new website has been developed - but some say it's not consumer friendly enough. Bolland's answer to that is "it will take time". And after 130 years in the business Marks and Spencer does know a thing or two about longevity.