viewMarks and Spencer Group PLC

M&S boss quits as festive clothing sales dip

M&S said its food business had an excellent third quarter to Boxing Day

Clothing and other non-food sales dropped 5% due to warm weather

Marks & Spencer (LON:MKS) had its best-ever Christmas for food but clothing sales fell again, sparking the departure of its chief executive.

M&S said its food business had an excellent third quarter to Boxing Day in a highly competitive market, with sales up 3.7% and by 0.4% on a like-for-like basis.

But clothing and other non-food sales dropped 5% due to warm weather and stock availability issues.

The company upgraded its general merchandise (GM) gross margin guidance to the top end of a range of between 200 and 250 basis points, or between two and two-and-a-half percentage points.

Chief executive Marc Bolland said the GM sales were disappointing and he had decided to step down from his role at the end of the financial year on April 2.

He will hand over to the company's GM executive director, Steve Rowe, who has been with the company for more than 25 years.

Chairman Robert Swannell said: "Over the last six years Marc Bolland has led Marks & Spencer through a period of necessary change. Over this time, the company has made significant investment in enhanced infrastructure and capabilities.

"I am delighted that, after the most rigorous succession planning, Marc will be succeeded by Steve Rowe. Steve has a deep knowledge of M&S and a proven track record of delivering results in key parts of the business."

Bolland said: "M&S had an excellent Christmas in food, delivering record Christmas sales and strongly outperforming the market.

"GM sales were disappointing. We continued to prioritise gross margin and held back from the heavy discounting seen across the market in the run up to Christmas. As a result we now expect GM gross margin to be at the top end of the guided range.

"I'd like to thank all our colleagues for their hard work and great service over the Christmas period."

Quick facts: Marks and Spencer Group PLC

Price: 110.75 GBX

Market: LSE
Market Cap: £2.16 billion

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