Marks & Spencer (M&S) has revealed a further decline in fashion sales following its admission that a turnaround plan is 18 months behind schedule.
The retailer said sales in its troubled clothing and home division fell by 7.8% in total and 5.5% on a like-for-like basis in the six months to 28 September.
It admitted several problems including supply chain issues and a “shape of buy that remained too broad”.
M&S said its food arm outperformed the market, with revenues rising 0.9% on a like-for-like basis.
It was not enough to prevent trading profits falling 17% to £176.5m.
On a pre-tax basis, earnings were 52% up at £153.5m because of fewer one-off costs related to its turnaround efforts.
Chief executive Steve Rowe said the shake-up was now “running at a pace and scale not seen before” at the chain.
He is now personally leading the charge to bolster sales and profitability in its clothing offering – a division that has plagued the company for the past decade – after fashion boss Jill McDonald was sacked in the summer.
The company aims to shut 120 full-line stores by 2023 under its plans to become a ‘digital first’ retailer but with a strong store presence. It closed 17 sites between April and September.
Ahead of its first foray into online food delivery, through a partnership with Ocado due to begin within the next 12 months, it is to open more food outlets than it closes.
It went cap in hand to shareholders to help fund the £750m Ocado deal and suspended dividends.
There was further turmoil for investors when it was revealed last month by Sky News that chief financial officer Humphrey Singer had quit – days before M&S was formally relegated from the FTSE 100 for the first time in its history.
This has all been taking place while its turnaround efforts are frustrated by the crisis facing the wider high street – with consumer spending being held back by political and economic uncertainty at a time of rising costs for retailers from things such as business rates, rents and minimun wage rules.
While it has seen a number of its biggest fashion and homeware competitors fall or seek rescue deals, the numbers show M&S has failed to capitalise.
However, the retailer said it had started to see an improvement in October.
Mr Rowe told investors: “For the first time we are beginning to see the potential from the far reaching changes we are making.
“The Food business is outperforming the market. Our deal to create a joint venture with Ocado is complete and plans to transition to the M&S range are on track.
“In Clothing & Home we are making up for lost time. We are still in the early stages, but we are clear on the issues we need to fix and, after a challenging first half, we are seeing a positive response to this season’s contemporary styling and better value product.
“We have taken decisive action to trade the ranges with improved availability and shorter clearance periods.
“In some instances dramatic sales uplifts in categories where we have restored value, style and availability illustrate the latent potential and enduring broad appeal of our brand.
“Our cost reduction and store technology programmes are on track.”