M&S losing battle on the High St

MARKS & Spencer will report a further downturn in trading this week, just as it unveils plans to buy back £2.3 billion of shares from its investors.

According to leaked industry figures, M&S is continuing to haemorrhage market share by both volume and value in clothing. Womenswear, traditionally the chain's strength, has been particularly hard hit.

Chief executive Stuart Rose was due to update the City on secondquarter trading on October 12, but financial rules oblige him to release current trading figures to the market on Tuesday to accompany the tender offer.

The offer, worth £1 a share, was promised to shareholders as part of Rose's campaign to retain their loyalty in the face of a £9 billion approach by retail mogul Philip Green this summer. The trading update, covering the period from July 14, is expected to make gloomy reading.

Confidential figures from the respected market research group Taylor Nelson Sofres covering 24 weeks to the end of August show M&S continuing to lose market share to rivals Next and Asda.

Next moved up to a 5.9% market share by value in women's fashion in this period, from 4.7%, while M&S dropped back from 14.2% to 13.6%.

The volume figures for the clothing market overall in this period now show M&S neck-and-neck with supermarket giant Asda at just under 10%. But while M&S has remained static, Asda has gained nearly 2% over the past half year.

Rose and the M&S board are due to meet tomorrow to decide on the price range at which it will offer to buy back shares from investors.

The final price will be based on the level of demand from shareholders within the range. Analysts expect M&S to offer up to 400p, reflecting the highest price that Green was prepared to table.

M&S is nearing the end of the consultation process on the 650 redundancies announced by Rose in July. The job cuts are expected to be finalised before Christmas.

The job losses are mainly in nonprocurement, or back office roles. However, a company spokesman denied industry rumours that further head office redundancies are planned in more high-profile merchandising and buying jobs.