Will Marc Bolland have a fairytale ending at Marks & Spencer?

After years of disappointing the City with flagging sales and falls in profits, Marks & Spencer chief executive Marc Bolland was finally able to present a cheerful set of figures yesterday.

Bolland will quite rightly take the opportunity to bask in his new found favour as long as possible. But he will know there is much work to be done before M&S can claim to be a high street darling once more.

The good news was around group profit, food and margins. M&S delivered its first profit rise in four years and unveiled food like-for-likes up 0.6%. M&S Food has outperformed the market by 3.5% and has achieved 22 consecutive quarters of like-for-like growth.

Not bad in an incredibly tough market in which its competitors are suffering slumping sales and undergoing huge restructuring.

There was good news too on margins, in the UK they were up 75 basis points at 41.4% as a result of gains in general merchandise. And M&S expects to make further improvement in the current year too.

Concern over clothing

But a cautionary note must be struck. Its dominant general merchandise business, comprising predominantly clothing, is still a worry. Like-for-likes fell 3.1% over the year, which Bolland himself admitted “is not good enough”.

While the fourth-quarter GM performance – like-for-likes rose for the first time in 14 months, albeit by just 0.7% – provided hope that its fashion is finally striking the right cord among shoppers, the City will need more evidence of sustained momentum before breaking out the Champagne just yet.

And however much of a stir it has caused among fashionistas, it’s unlikely a suede brown skirt alone can propel general merchandise sales in the first quarter, although the retailer should be praised for capitalising on the hype that has made it a must-buy item this spring.

Other areas of concern are online and international. Sales in the former channel dropped 2% following operational challenges, a replatforming of the site and a new editorial focus that shoppers did not warm to immediately. But like GM, the fourth-quarter trend in online was encouraging, with sales up a 13.8%.

International was another sore point. Operating profit slumped 24.8% to £92m, dragged down by Russia, Ukraine and Turkey, which were impacted by political instability and local currency fluctuations.

But the headline numbers are undoubtedly positive, and Bolland, who yesterday fielded questions over whether he will step down in the near future, has been able to keep the bears at bay. Now, all eyes are on its July first-quarter trading update.

If he can build on the momentum of the fourth quarter, just like M&S’s Christmas ads last year, the Dutchman may well have the fairytale ending he dreamed of at the British institution that is Marks & Spencer.

• Nicola Harrison is content editor of Retail Week