Even Gary can't provide the M&S factor

Monday 9 July 2012

Celebrity advertising campaigns fail to boost fashion purchases for the high street giant, but ASOS shows that style still sells online.

MARKS & Spencer is expected to reveal its worst quarterly trading performance for more than three years when it provides an update tomorrow.

Retail experts are forecasting dire figures for the first quarter of its financial year, even though M&S has invested in celebrity-laden advertising campaigns featuring the likes of Gary Barlow.

The retail giant, which operates more than 700 stores in the UK, has borne the brunt of falling high- street spending as it competes with frenzied levels of promotions. However, the wettest April and June on record are likely to have added to its woes, with women's fashion expected to have been the worst hit. The City expects UK like-for-like sales excluding VAT to fall 3% in its worst performance since the quarter to March 2009. And non-food sales are expected to be down 6.7% – its worst performance since the quarter to the end of December 2008. M&S bosses are also due to face tough questions over pay at the group's annual meeting tomorrow after shareholder body Pirc labelled bonus plans "excessive". Pirc has advised investors to abstain from voting for the remuneration report for the year to April in protest at awards, which include £2 million for chief executive Marc Bolland. It said awards made last year were "excessive" at twice the level of salaries, despite the retailer reporting its first drop in profits for three years. It added the pay structure still promoted "future excessive payouts" and hit out at a £4m "golden hello" for Laura Wade-Gery, executive director for multichannel e-commerce, after she joined from Tesco. Figures tomorrow from online fashion and beauty retailer Asos are expected to reveal that a price-cutting drive has helped it regain its UK sales momentum. The company, which targets twenty somethings with clothes based on outfits first worn by celebrities, has seen its share price quadruple over the past three years as it surfs a boom in internet shopping. But its last trading update revealed that UK sales growth slowed to just 4% in the three months to the end of March, compared with 10% in the previous quarter. Numis analyst Andrew Wade expects UK sales to bounce back with an 8% increase in the three months to the end of June, helped by an initiative to cut prices on its own-label products.

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Even Gary can't provide the M&S factor

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