* Q4 UK like-for-like non-food sales down 3.8 pct
* Analysts had forecast drop of between 4 and 6 pct
* UK like-for-like food sales up 4.0 pct
* FD says firm has backing of major shareholders
* Shares up 3.2 pct
By James Davey
LONDON, April 11 British retailer Marks &
Spencer posted a seventh straight quarterly fall in
underlying sales of clothing and homewares, having to rely on a
strong performance from its food business to deliver overall
Marc Bolland, chief executive of the 129-year-old retailer
that has recently been the subject of takeover speculation, is
under pressure from shareholders to revive its clothing
He has said that a new general merchandise management team
led by John Dixon, the former boss of M&S's food business, and
Belinda Earl, the former chief of Debenhams and Jaeger,
will not make a major impact on sales until autumn/winter
collections hit the shops in July.
An important early test will be the reaction of the fashion
press when they see the ranges on May 14, a week before M&S
reports 2012-13 results, with analysts forecasting a 7 percent
fall in pretax profit to 659 million pounds ($1 billion).
Trevor Green, head of institutional equities at Aviva
Investors, an M&S shareholder, said he wants M&S to present a
clear strategy for womenswear when it reports results.
"If not, then patience will start to wear thin with
shareholders as Bolland has already been given three years to
turn the general merchandise side around," he said on Thursday.
Aviva Investors holds 0.1 percent of M&S, according to
Thomson Reuters Eikon data.
M&S finance director Alan Stewart said the company had the
backing of its major investors.
"What we're hearing directly from shareholders is that they
are supportive of our strategy ... and that they recognise it's
going to take time," he told reporters.
Shares in M&S rose 3.2 percent after it said sales of
non-food products, spanning clothing, footwear and homewares, at
stores open more than a year fell 3.8 percent in the 13 weeks to
March 30, its financial fourth quarter.
That was slightly better than analysts' forecasts of a drop
of between 4 and 6 percent, but matched the fall of the previous
quarter when M&S moved to protect profit margins by offering
"People had got themselves into a very gloomy frame of mind
about M&S ahead of this statement, so any non-disastrous news
was probably always going to make the shares bounce," one of the
ten largest M&S shareholders said.
Last month was the coldest March in Britain since 1962,
hurting demand for summer clothes and shoes, according to an
industry survey published on Tuesday.
"We held our full price stance for most of the (fourth)
quarter but trading conditions became difficult in March and the
market became more promotional. Therefore we responded with
selected tactical offers," said Bolland.
M&S's like-for-like food sales rose 4.0 percent, ahead of
the overall market, analyst forecasts of an increase of 1.9 to
3.5 percent and a third-quarter rise of 0.3 percent.
The food division, which had a record Easter week, benefited
from products such as Belgian chocolate mini hot cross buns, of
which it sold more than 600,000 packs, and from M&S being
untainted by a horsemeat scandal that hurt rivals.
M&S, which serves 21 million customers a week from over 700
British stores, said total UK like-for-like sales rose 0.6
percent, having fallen 1.8 percent in the previous quarter.
Analysts said the numbers had bought some time for Bolland,
who dismissed speculation regarding his own position, saying:
"I'm thoroughly enjoying the challenge."
Many UK retailers are finding the going tough as consumers,
whose spending generates about two-thirds of UK gross domestic
product, fret over job security and a squeeze on incomes.
Separately on Thursday British baby and maternity products
retailer Mothercare posted flat UK like-for-like sales
in its fourth quarter, while books and stationery retailer WH
Smith reported a 5 percent rise in first-half
M&S stock last month hit a 28-month high after a newspaper
reported that the Gulf state of Qatar was planning a bid.
Neither side has commented on the report.
Bolland said on Thursday that Britain's takeover regulator
would have forced them to comment, if there was any substance to