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Sparks from Marks at last

Thursday, April 02, 2015 - 01:55

For the first time in 15 quarters Marks & Spencer posts a rise in non-food sales. As Hayley Platt reports, the British retailer says it's starting to put its online distribution problems behind it.

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It may have taken almost four years. But at last Marks and Spencer is seeing some growth other than food sales. General merchandising including clothing and homeware rose 0.7 percent in the first 3 months of the year. Ending 15 quarters of decline. It was a welcome relief for investors, says IG's Alastair McCaig. (SOUNDBITE) (English) ALASTAIR MCCAIG, MARKET COMMENTATOR, IG.COM SAYING: "In fairness it completely reverted what the market expectations were. It's certainly a record that was unwarranted really when you consider the efforts that have been made by the management and I guess the patience and tolerance of the markets especially when you consider the 3-year turnaround plan." Overall sales rose 1.9 percent. And food, which remains the bright spot, grew 0.7 percent, outperforming the wider grocery sector. Still it hasn't all been plain sailing. The British retailer, under the leadership of Marc Bolland, has spent billions of pounds improving its offering. Investing in refurbishing existing stores, opening a new distribution centre and an online platform which has suffered teething problems. So could this be the end of its troubles? (SOUNDBITE) (English) ALASTAIR MCCAIG, MARKET COMMENTATOR, IG.COM SAYING: "I do think there's been a gradual and sustainable shift in the perception of the Marks and Spencer shopper. I think the age demographic has undoubtedly migrated south, something that they desperately needed to happen and I think they have managed to get a slightly younger shopper through the door. This has been an improvement and this is part of the reason why we've seen the share price reflect that." But the group's international performance hasn't been doing as well. The Russia/Ukraine crisis has affected sales there as has a slide in the euro. Shares though have been steadily improving over the last six months. They rose more than 6 percent in morning trading.

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Sparks from Marks at last

Thursday, April 02, 2015 - 01:55