M&S to keep US food stores

STORES group Marks & Spencer has finally abandoned attempts to sell its US food retail chain, Kings Super Markets, more than two years after putting it up for sale.

M&S chief executive Roger Holmes said market conditions in the US have left potential buyers unable to raise sufficient funds to buy the business at 'a fair price'.

It had been close to clinching a sale little more than a year ago, agreeing a $160m (£100m) deal with privately owned D'Agostino Supermarkets

But that deal collapsed last November and talks with other potential buyers were re-opened. These are thought to have included Gristede's, another small US food retailer, which had previously held talks over the business.

Now, however, M&S will retain the 27-store chain, which is based in New Jersey and Long Island, said Holmes.

'Although Kings is not central to our strategy, we believe that maximising shareholder value will be achieved by working with the senior management team to develop the business and drive financial performance,' he said.

Profits at Kings tumbled by more than a third to £7.9m in the year to March, on sales down by almost 12% at £290m.

The original decision to sell Kings was part of the group's strategy to concentrate on turning round its core UK business.

Most recent results from M&S, covering the first quarter, were deemed disappointing by the City, with a like-for-like sales rise of 3.8%, but Holmes insisted the recovery remains on track.