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By Bloomberg

Marks & Spencer Group Plc reported sinking revenue of non-food items as the U.K.’s largest clothing retailer experienced delays in fulfilling online orders at the busiest time of the year. The stock fell in London trading.

Same-store sales at the division that includes the apparel business dropped 5.8 percent in the 13 weeks ended Dec. 27, the London-based company said today. That compared with the median analyst estimate compiled by Bloomberg for a 2 percent fall.

“To have that level of underperformance is highly alarming,” said Bryan Roberts, an analyst at Kantar Retail in London. “Their major competitors like Next have had a much more positive experience while undergoing exactly the same market conditions. It’s pretty disastrous really.”

Chief Executive Officer Marc Bolland is struggling to revive the retailer’s clothing sales as shoppers turn to rivals with more-established online offerings such as Next Plc and budget chains including Primark. Marks & Spencer’s Castle Donington distribution center in central England struggled to process a surge of orders prompted by the Black Friday weekend, undermining attempts to restore online sales growth.

Marks & Spencer shares fell as much as 3.6 percent. The stock traded 3.1 percent lower at 448.90 pence as of 8:01 a.m. in London, bringing their 12-month advance to 0.9 percent.

‘Unsatisfactory Performance’

“We had a difficult quarter in general merchandise, dominated by unseasonal conditions and an unsatisfactory performance in our e-commerce distribution center,” Bolland said in the statement.

Customers last month experienced periods of being unable to place in-store click-and-collect orders for the following day and standard deliveries to home addresses took twice as long as normally promised. The company has made progress in addressing the distribution issues and is now back its normal delivery proposition, it said today.

The delays added to the company’s digital woes, with Marks & Spencer saying last year that a redesigned website introduced in February would weigh on sales for six months as customers re- registered accounts and learned how to navigate it. Online sales fell 5.8 percent during the Christmas period.

The retailer’s Internet sales are on a “real downward track” compared to John Lewis and Next Plc, said John Mercer, a retail analyst at Mintel. Next said Dec. 30 that sales at its home-shopping business rose 7.5 percent in the two months before Christmas.

The retailer’s upscale food division has performed better amid a grocery price war that has squeezed the profitability of big supermarkets from Tesco Plc to Wm Morrison Supermarkets Plc. Same-store sales of food rose 0.1 percent in the quarter, though fell short of the 1 percent expected by the analysts surveyed.

Marks & Spencer said its operating costs will rise about 2 percent, less than a prior forecast for 3.5 percent, due to savings measures and lower volume growth.