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M&S sees multichannel sales grow by more than a quarter

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Marks & Spencer today reported a 28.5% growth in its multichannel sales, of which, it said, more than half are now picked up in store.

The company said the number of customers visiting its website and the overall conversion rate had both grown during the period.

“The convenience of our Shop Your Way service continues to drive growth across both online and in-store, with 55% of multichannel orders now collected in store or ordered in-store for home delivery,” the company said today in its half-year results.

“This multichannel approach helped us deliver a great season on Back to School in kidswear, with multichannel sales growing by 25% and representing 38% of total UK sales.”

Mobile sales grew by more than 70%, with tablet growth particularly strong at 140%. These now account for about 25% of sales, compared with 11% a year ago.

Some 10m people viewed its new womenswear advertising campaign when it got a Facebook launch, billed by the company as a “marketing first”.

M&S has now brought the internet and related technology into 55 stores, it said, and sales performance in those stores is 10% ahead of the rest of the estate. Similarly, 93 new concept beauty stores are enjoying sales that are 55% ahead of the rest of its stores.

The update came as M&S revealed group revenue of £4.9bn in the 26 weeks to September 28, up by 3.9% compared to the same time last year. UK sales rose by 3.1% to £4.3bn, while international sales accounted for £552.4m, 11.2% up on last time. The UK saw a 0.7% rise in like-for-like sales, which strip out the effect of store openings and closures. Food sales grew by 2.5%, like-for-like, while general merchandise sales fell by 1.5% on the same basis, thanks to a “challenging” clothing market.

Underlying profits before tax fell by 8.9% to £261.6m, but a boost that came primarily from property sales and a pension credit meant that bottom line pre-tax profits grew by 0.2% to £280.6m.

Chief executive Marc Bolland said the retailer had performed well in food, international and M&, while its priority for the half-year had been the relaunch of its womenswear range.

“”At the same time we continued to invest in the long term transformation of the business,” he said. “We are pleased with the progress made, given the high level of activity and a number of key projects launching this year. This has led to a higher level of additional costs, which while planned for, have impacted short-term results.

“This year marks the final year of elevated capital investment in the business. From 2014/15 we will move to a lower, more sustainable long-term investment level of c.£550m. This, combined with the operational improvements we are making, makes us confident that we will deliver a material improvement in free cash flow from 2014/15, and we remain focused on delivering improved shareholder returns.”

M&S also said that its new dedicated ecommerce facility in Castle Donington was seeing volume build according to plan. Its web platform is on course to launch in Spring 2014.

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