By George, M&S loses its clothing sales crown to Asda

Marks & Spencer has lost its crown as the country's largest clothing retailer to the US-owned supermarket chain Asda, it emerged yesterday.

Marks & Spencer has lost its crown as the country's largest clothing retailer to the US-owned supermarket chain Asda, it emerged yesterday.

In a fresh blow to the beleaguered high street chain, industry figures show that Asda snatched the top spot, increasing its market share in the three months to July.

Asda now has 9.4 per cent of the UK clothing market, compared with M&S's 9.1 per cent share, according to confidential figures leaked over the weekend. The figures, from the market research firm Taylor Nelson Sofres (TNS), are also understood to highlight the inroads made by Tesco in the clothing market. Its share is now at 6.5 per cent compared with 3.9 per cent a year ago.

Next and Matalan were other winners on the high street, but Woolworths, New Look and Peacocks are thought to have conceded ground to rivals.

The achievement comes just 14 years after Asda launched its George brand, which became best known for its £4 pair of jeans. George Davies, the founder of Next who launched the George brand, is now designer of M&S's own-brand Per Una range.

The TNS figures are based on the number of items sold, not total value in which M&S is still market leader thanks to its higher prices. In addition, the period covered by the survey is one of Asda's strongest - and M&S's weakest - trading periods. M&S does best in the autumn on the back of its knitted goods ranges.

Nevertheless, the news will intensify the pressure on Stuart Rose, the M&S chief executive, to revive the fortunes of the ailing high street icon. Investors last month backed Mr Rose in a £9.1bn takeover tussle with Philip Green, who owns Bhs and the Arcadia group. Mr Rose has outlined a plan for improving trading at M&S that includes reducing the number of clothing lines and revamping stores to make them less cluttered. Changes are likely to take at least six months to take full effect, but M&S is targeting a return to like-for-like sales growth in the 2005-06 financial year.

Asda, which employs 130,000 staff at 265 stores and four George stand-alone outlets in the UK, last week revealed that clothing was the fastest growing line of its business. Like-for-like sales of clothing during the first half of 2004 were about 8 per cent higher than a year ago. In contrast, comparable food sales grew by about 5 per cent.