10 July 2012 12:18
Marks & Spencer has announced that Kate Bostock, head of non-food, will be leaving the company in October "by mutual consent" after the company reported its worst non-food sales in over three years.
The retailer, which has more than 700 stores in the UK, blamed stock problems for a 6.8% decline in clothing and general merchandise sales in the 13 weeks to June 30th, its worst performance since the quarter to December 2008.
Despite high-profile adverts featuring celebrities such as Gary Barlow, overall UK like-for-like sales fell 2.8%, also the worst performance for M&S for more than three years, even though food sales rose 0.6%.
With womenswear hit by high levels of promotions and the wet weather hitting sales of casual tops, Ms Bostock will step down as the firm parachutes in Belinda Earl, ex-CEO of Debenhams, Jaeger and Aquascutum as style director to hone its range. Ms Earl will report to John Dixon, who will replace Ms Bostock. Mr Dixon has been with the company for 26 years and has a "strong track record" in a variety of roles, most recently executive director of food and previously director for home and direct.
The results will pile the pressure on chief executive Marc Bolland at M&S's shareholder AGM today amid expectations that many shareholders will vote against a pay package that could earn him as much as £6 million.
The stock issues were a continuation of the problem the company reported in April when it did not buy enough of some of its best selling lines, and said it could have sold more than double the number of pump shoes had the stock been available.
However, M&S is confident that it is taking the necessary steps to address the poor performance of its non-food business. As well as the shake-up in the management team, it has improved buying and merchandising and believes its stock will be back on target in time for the autumn-winter season, which will be launched in stores later this month.
Sales of coats, jackets and hosiery had done well amid the grim weather but the fall in sales of casualwear hurt it because it traditionally makes up a large proportion of its sales at this time of year.
Food sales have been boosted by the celebrations surrounding the Diamond Jubilee, helped by launching its Simply M&S budget range and new products including 200 British lines.
The group also said the rollout its new design of stores was on track, after it admitted its outlets were difficult to shop in.