After 15 consecutive quarters of failing to turn sales around in clothing, Marks & Spencer has finally reported growth in its last quarter results, with chief executive Marc Bolland claiming consumer appreciation of “style” has been boosted.
Marketing has played its part. Despite the company’s spend levelling off in the second half of 2014, Bolland said it had landed some “very successful campaigns” featuring the likes of model Rosie Huntington Whiteley.
Meanwhile, its online proposition is performing well, claims Bolland, despite a shaky start and dismal performance last year following a design overhaul.
Bolstering fashion credentials
Bolland revealed internal research for the Autograph and Limited sub-brands found consumer perception of M&S as a brand with ‘style’ was up four per cent, while the perception of ‘quality’ was similarly positive (up six per cent).
This has been helped in no small part by what Bolland described as M&S’ “iconic” suede skirt. Yet to be released, it has already garnered support from a plethora of fashion magazines and front row stars such as Alexa Chung and Olivia Palermo during key Fashion Week events.
With the lux version priced at nearly £200, it is clear M&S is targeting a wider range of consumers and Bolland claims the amount of interest has driven extra traffic to its online store and fashion hub – Style & Living.
However, for its Spring/Summer TV campaign (below), M&S has focused on cementing its ‘style’ and ‘quality’ credentials with an ad which shows a number of women trying on key items, none of which are priced over £75.
It is expected the ad will continue to drive the momentum for both Autograph and Limited, which saw double digit growth in the last quarter. Bolland said availability has been up improved in a bid to keep up with increasing demand.
Paul Thomas of the consultancy Retail Remedy said that with the improvements in fashion sales should come the confidence needed to up the pace and close the gap on John Lewis and Next - both of which have lured many M&S customers away.
“The voices questioning whether M&S can continue to sell only its own brand clothing won't have been silenced. But these results at least hint that M&S is returning to what it should be - a clothing retailer with a successful sideline in food, rather than a successful food retailer with a moribund clothing business holding it back,” he added
Following a website overhaul in February last year, sales proved disappointing (down 8.1 per cent in Q2 last year) for M&S while inability to keep up with unprecedented traffic on Black Friday ended 2014 on a low.
However, for the latest quarter Bolland said online sales returned to growth as hoped across key website metrics including traffic, conversion and customer satisfaction with sales up 13.8 per cent.
More people are beginning to browse with the retailer through its Style & Living hub as it noted 2.5 million visitors during the period.
Meanwhile, 10 per cent more people subscribed to M&S.com, with traffic up to 6.6 million.
To continue to deliver against these metric, Bolland said the IT team in place is updating the site with daily improvements.
M&S said it will continue to "innovate" to maintain the positive trajectory having launched over 350 new products in the 13 week period, more than it had in any other quarter.
It will also continue to focus on full-price sales rather than chasing promotions.
Grocery is expected to uphold its strong performance. Food sales grew 0.7 per cent on a like-for-like basis, outperforming its "big four" supermarkets such as Tesco, Adsa and Sainsburys.
It remains to be seen if M&S will consitently deliver such result across the board, with Retail Temedy's Thomas cautious of premature celebration.
“It might look like M&S has been taking only tentative steps, but M&S wouldn’t describe them that way. Changing the course of such a big ship is no easy task. It needs major effort, and that effort can be rewarded with only a subtle effect; which is what we believe we are now seeing. But once it starts to move, it is easier to keep it moving."
“In the meantime, Bolland and his team can be reassured that they are steering the ship onto the right course; they just need to crank up the speed before the market moves too far ahead.”
The retailer's full year results are expected 20 May.