M&S: Difficult time for Ireland

IRELAND is not in great shape, according to the new chief executive of M&S.

Marc Bolland said Ireland has had a difficult time and is recovering from the economic downturn. He added that Greece is also in a “difficult situation”.

According to figures released yesterday the international performance of the retail giant lagged behind Britain, with sales rising just 0.9% due to the impact of exchange rate fluctuations as well as difficult trading conditions in markets such as Ireland and Greece.

Meanwhile a proposed increase in VAT in Britain and other measures to curb the country’s budget deficit are likely to damp consumer confidence, according to M&S.

Sales at British stores open at least a year rose 3.6% in the period ended July 3, slower than the previous quarter’s 5.1% increase.

Mr Bolland maintained guidance for “flat” gross margins this year.

“A cautious outlook and no change to gross margin guidance” is weighing on the share price, Greg Lawless, an analyst at Collins Stewart said.

M&S increased market share by 0.5 percentage point in general merchandise and 0.1 percentage point in food, Bolland said.

“Momentum in general merchandise persisted and share gains are now more apparent given the weaker backdrop,” Matthew McEachran, an analyst at Singer Capital, said in a report.

Mr Bolland, who is in his ninth week at the helm, said he has been meeting suppliers in China and Hong Kong, visiting stores and meeting customers ahead of his strategic review, expected at the interim results in November.

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