M&S to see fashion sales plunge say analysts

By

Sandra Halliday

Published
Mar 31, 2020

Analysts at Goldman Sachs have said they expect clothing & home division sales at Marks & Spencer to fall by up to 60% in the three months to the end of June. 

They said a four-week closure period running from March into April would see a 90% drop in the division’s sales and that would drive down the result for the entire quarter. 

And the bank also expects the UK retail giant European’s sales to drop by around 30% in the first half overall. Of course, if the closure period lasts longer than four weeks, we have to assume that those figures could be revised downwards

While the company’s foods division is benefiting from the current consumer focus on buying essentials, its premium image means it's not benefiting as much as many supermarket giants.

And while food is booming to a certain extent, the already-troubled clothing & home division is believed to be seeing sales almost grinding to a halt. 

Not that the retailer is alone in this problem. There are currently billions of pounds worth of unsold fashion products sitting in shops and warehouses. And while some retailers have reportedly cancelled any future contracted orders, the goods they’ve already taken delivery of are a major headache for them. 

If shops can open, perhaps at some point during May, the chances are that they will be full of discounted spring and summer products. The issue could be particularly acute for certain sectors such as festival and holiday clothing. Festivals have been cancelled all around the world and few consumers are planning holidays at the moment. Even when the situation gets back to normal, the hit to the economy means many consumers will still focus on buying essentials rather than discretionary items.