A slew of high street retailers are due to release their Christmas trading updates this week but in fashion all eyes will be on Marks & Spencer, which analysts predict will reveal a dip in performance over the festive period.
According to The Sunday Times some analysts are predicting a -3.4% drop in sales at clothing & home division along with a -1.1% drop in food. Clive Black, an analyst at Shore Capital told the publication the the bellwether retailer will not be alone in reporting a tough Christmas.
“Going into Christmas, the clothing market was very difficult in general. M&S has been focusing on full-price sales, so that will hit its headline clothing and homeware number. There’s no doubt it was a very volatile last four months of the year, but every business will have had an exceptionally tough time, so M&S will not be in a club of one,” he said.
Last week Next was the first major retailer to declare its hand with a surprise 1.5% increase in full-price sales, however its performance was buoyed by strong ecommerce numbers. Nonetheless it was cause for optimism, particularly as Amazon had also said its Christmas was its best yet and privately owned fashion retailer Jigsaw said it was 7% up year on year.
However the optimism was short-lived as Debenhams announced a -1.5% drop in group like-for-like sales the following day and warned on profits too, causing its shares to drop. Fellow department store House of Fraser is also reported to be in negotiations with its landlords to reduce rents across its portfolio as it too is believed to have had a tough time – its trading statement is due later this week.
Outside of fashion grocers Tesco, Morrisons and Sainsbury’s are due to report this week with analysts predicting all three will be up, while value grocer Aldi has already reported Christmas sales up 15%. In fashion etailers, such as ASOS and boohoo, are predicted to be among the season’s winners.