8th Jan 2021 07:58
(Alliance News) - Marks & Spencer Group PLC on Friday said its Christmas trading was "robust" though a nationwide lockdown in England proved costly, causing revenue in its Clothing & Home unit to tumble more than 40% in November alone.
For the whole of the retailer's third quarter ended December 26, group revenue fell 8.4% yearly to GBP2.77 billion. In the UK arm alone, revenue fell 8.2% to GBP2.53 billion and was down 7.6% on a like-for-like basis.
By unit, it was a familiar story for the mid-cap retailer. The Food arm saw 2.2% annual third-quarter revenue growth to GBP1.74 billion. On a like-for-like basis, revenue in the unit rose 2.6%.
At the Clothing & Home arm, third-quarter revenue was down 25% year-on-year at GBP787 million, falling 24% like-for-like.
Before November's restrictions, revenue was down 17%, before tumbling 41% during England's lockdown that month.
In December alone, revenue at Clothing & Home was down 19%.
"Given the on-off restrictions and distortions in demand patterns our trading was robust over the Christmas period. More importantly beneath the Covid clouds, we saw a very strong performance from the Food business including Ocado Retail and a further acceleration of Clothing & Home online," Chief Executive Officer Steve Rowe said.
M&S noted that at the clothing arm's sales mix was "heavily biased" toward lines in leisurewear and sleepwear, products that have seen sales boosted by stay-at-home orders during the Covid-19 pandemic.
M&S last week Wednesday said its Goodmove athleisure range will expand to include both kidswear and menswear. It initially only offered womenswear.
"Near-term trading remains very challenging, but we are continuing to accelerate change under our 'Never the Same Again' programme to ensure the business emerges from the pandemic in very different shape."
The company added that the UK's post-Brexit trade deal with the EU means that M&S "will not incur tariffs on our core UK sales".
"However, potential tariffs on part of our range exported to the EU, together with very complex administrative processes, will significantly impact our businesses in Ireland, the Czech Republic and our franchise business in France which we are actively working to mitigate," the company added.
M&S also said it may cut store costs, in the wake of England being placed under a third lockdown earlier this week.
By Eric Cunha; [email protected]
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