M&S sales still on the slide

THERE were no celebrations at Marks & Spencer, which again disappointed the City with news of a further slide in sales over the final quarter of the year.

There was a slight slowdown in the rate of decline, but not as much as analysts had hoped, and underlying sales for the three months to 2 April were down by 6.7% on the core clothing and home side. That compares with a fall of 8.5% in the third quarter.

Figures from the foods side were particularly disappointing, with the decline growing from 2.9% to 3%, hit by a poor performance from M&S's city centre shops. For the group as a whole, like-for-like sales were down 4.9% against 6% in the third quarter.

Today's dismal figures will further increase pressure on chief executive Stuart Rose, parachuted in some 10 months ago to fend off the £9.1bn bid from Bhs billionaire Philip Green.

The trading environment 'continues to be difficult,' but 'it's steady as she goes', said Rose. 'This is not a disaster but I accept that the next couple of quarters will be pretty crucial.'

Profits for the year just ended will fall within the £600m-£625m forecast given at the time of M&S's shock post-Christmas profits warning in January, but the range has now been narrowed to between £610m and £625m.

Rose said excess stocks, which were behind the profits warning in January, have been cleared.

Some in the City appeared to have been fearing a profits warning. In the absence of one, M&S shares rose 13¾p to 354¾p.

David Buik at financial spread-betting company Cantor Index said: 'The movement of M&S's share price today beggars belief. Hell has a better chance of freezing over than Philip Green or any other retailer buying M&S at between 350p and 400p.

'I have no idea what M&S are paying Paul Myners as acting chairman, but it surely is not enough. His ability and Stuart Rose's savvy in keeping the main minority shareholders such as Brandes on side will end up being folklore.

'Not only did the bears get squeezed out this morning after these deeply average results, but the market took it upon itself to think that a 'white knight in shining armour' would be charging down Baker Street to sweep up this fashion damsel in distress up at around the current share price.

'I am but a mere bookmaker - mortal to the end - but even using my most vivid imagination, no chance.'