Clothing disappoints at M&S

Once again, general merchandise (GM) struggled, with same store sales falling 4.1 per cent, offsetting a 1.7 per cent rise in food. Management blames the lacklustre performance on difficult trading conditions, competition and "merchandising issues". This is management speak for drab clothes, and to their credit, the new team brought in last year to spice up clothing has unveiled an autumn/winter range that has been well received by the fashion press.

Mr Bolland says M&S has improved the quality of the clothes, without increasing the price, which he says will resonate with customers. "Our quality is better than our competitors' already," he said.

But, that doesn't detract from the underlying figures. Total group sales grew 1.3 per cent in constant currency, but improved gross margins and better-than-expected cost control weren't enough to stop adjusted pre-tax profit from falling 6 per cent to £665m.

Underlying operating profit in the UK slumped 2.2 per cent to £661m as same store sales declined 1 per cent. International sales grew 4.5 per cent, driven by strong performance in Asia and the Middle East, but profit still fell 10 per cent to £120m, due to macroeconomic pressures in Europe and start-up costs in 'priority' markets.

On a more positive note, multi-channel sales rose almost 17 per cent as M&S improved delivery in the year, introducing a next day click and collect service. It also unveiled a distribution centre for online in May. A new website goes live next spring, and two additional UK distribution centres will come onstream in 2015-16.

Capital spending is expected to be £775m this year, much lower than previous guidance, falling to £550m in 2014-15, while gross margin is expected to improve 30 to 50 basis points. Mr Bolland said this shows that M&S has done most of the "heavy lifting" in terms of rectifying the chronic underinvestment over the past 20 years.