The popularity of M&S underwear among younger shoppers has been boosted by its 'B by Boutique' range
Demand for brands & Spencer's knickers among young women have boosted the retailer's sales by £1 billion, leading to its strongest performance since 1997.
M&S said more people than ever were buying underwear in her stores, with one from two women buying bras in the store. A total of 20 million bras and 60 million pairs of knickers were sold last year.
Demand was particularly strong among millennial and Gen Z shoppers, M&S said, with shoppers under 30 accounting for a third of bottom sales linen – twice as much as a year ago.
M&S said its lingerie range had grown in popularity among younger shoppers thanks to its 'B by Boutique' range, which is known for bolder and brighter styles. Sales of this line, released in 2022, grew by 16% over the year.
M&S's success in attracting younger shoppers will be seen as an indication that chief executive Stuart Machin's efforts to turn things around are bearing fruit. Bosses have fought to revive the clothing division, with previous executives saying the company was chasing older customers.
M&S is trying to reverse years of decline in its clothing business by launching new, more fashionable lines. Collaborations with social media influencers have also increased demand, with actress Sienna Miller named the face of a fall womenswear campaign. The company will also design casual suits for the England men's football team at this summer's European Championships.
M&S said it now has 10% of the clothing and homeware market after sales across the division jumped by 5. 3% per year.
In a message from the FTSE 100 company to investors on Wednesday, Mr Machin said it was «the start of a new M&S».
M&S shares rose almost 10% to 300p after the update , this is the highest level since 2017. Analysts at Peel Hunt said there was “virtually nothing to dislike about the results.”
Ian Lance of Redwheel, M&S's third-largest shareholder, said: «What's surprising is that it appears this turnaround strategy still has some way to go, but this is not yet reflected in the share price as many investors remain skeptical about the story about the restoration of Marks.»
Mr Machin said M&S had «wind in its sails» after its profits rose 58% to £716.4 million for the year to April. Analysts had forecast pre-tax profits and adjusted the line item at £684 million.
The retailer added that it ended the year «in its strongest financial position since 1997» with cash excluding lease liabilities at the end of March were £45.7m, compared with net debt of £355.6m a year earlier.
However, Mr Machin said there was «still a lot to be done», adding that he «will never say the M&S transformation is complete.»
He said: «Changing culture is work that is never 'done' and it is critical to changing M&S.
«We need to move faster and relentlessly challenge areas where progress has been slower, creating more efficient digital and technology infrastructure, accelerating the shift to truly personalized customer experiences and redefining priorities internationally.”
< p>M&S's grocery division was the biggest driver of sales during the year, up 13%. Mr Machin said a «virtuous cycle of investment in quality and innovation» had encouraged shoppers to buy more from the retailer.
M&S is investing heavily in updating its food range. Earlier this week, The Telegraph reported that the retailer plans to improve a further 1,000 of its best-selling products this year, including ready meals, sandwiches and cakes, having updated more than 1,000 products last year.
However, its online grocery business, which it operates as a joint venture with Ocado, made a loss of £37.3m, down from a loss of £29.5m a year earlier. M&S offset the hit to profits with cost-saving efforts and a 9.3% increase in full-year revenue to more than £13 billion from £11.9 billion a year earlier.
While M&S said Ocado's revenue had improved markedly, the company said the business' profitability remained «well below initial expectations».
Tensions between the two retailers have been growing in recent months. In February, Ocado threatened to sue M&S over the final payment for the joint venture. Ocado says the £750 million Ocado Retail joint venture failed to achieve the targets set by M&S when it was set up in 2019.
Mr Machin responded to the claims on Wednesday, saying the original agreement was «pretty clear.»
He said: «In relation to the conditional payment, the performance target was binary and dependent on revenues, and those revenues and those results were not achieved.»
He said the «small disagreement» over payment with Ocado was not has impacted the day-to-day operations of the grocery business.
“We are committed to Ocado Retail's turnaround strategy and are very focused on our delivery.”
M&S said it was avoiding the focus on promoting loyalty cards as some of its supermarket competitors. Mr Machin said M&S did not engage in «dodgy pricing» by offering customers different prices if they signed up to their schemes.
“The reason I say 'dodgy pricing' is because «that we don't think that offering customers who only use Sparks [M&S's scheme] different special prices, rather than providing them to everyone, is to be a reliable retailer.»
But he said M&S was currently reviewing its loyalty scheme.
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