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| M&S hit by poor Christmas sales | M&S hit by poor Christmas sales |
| (about 1 hour later) | |
| Retailing giant Marks and Spencer has reported a fall in sales over the key Christmas trading period, adding to signs of slower UK consumer spending. | Retailing giant Marks and Spencer has reported a fall in sales over the key Christmas trading period, adding to signs of slower UK consumer spending. |
| UK like-for-like sales fell 2.2% in the last three months of 2007, M&S said. Sales of clothes and homeware declined 3.2%, while food sales dropped 1.5%. | UK like-for-like sales fell 2.2% in the last three months of 2007, M&S said. Sales of clothes and homeware declined 3.2%, while food sales dropped 1.5%. |
| It was the firm's worst performance for more than two years sending M&S shares down 19% to 401 pence on the news. | It was the firm's worst performance for more than two years sending M&S shares down 19% to 401 pence on the news. |
| M&S said trading conditions would remain tough in 2008. | M&S said trading conditions would remain tough in 2008. |
| "We are concerned that this soft performance has been delivered despite huge cash investment in the stores, a considerable advertising campaign and strong trading momentum over the last two years," said Andrew Wade, an analyst at Seymour Wade. | "We are concerned that this soft performance has been delivered despite huge cash investment in the stores, a considerable advertising campaign and strong trading momentum over the last two years," said Andrew Wade, an analyst at Seymour Wade. |
| The fall in the value of M&S stock means it is approaching the 400p-per-share offer which retail tycoon Philip Green said he would pay for the firm in mid-2004. | |
| The BBC's Robert Peston said this was "potentially pretty embarrassing" for Sir Stuart and the M&S board, given how much they had spent on modernising the stores and advertising. | |
| Discounting | Discounting |
| Other retailers were also hit over Christmas as consumers pulled back their spending. | Other retailers were also hit over Christmas as consumers pulled back their spending. |
| The High Street boom is over Robert Peston, BBC business editor Read Robert Peston's blogSee M&S share price | |
| On Monday, the British Retail Consortium said UK retailers had seen the slowest sales growth in December for three years, with sales up by just 0.3% year-on-year. | On Monday, the British Retail Consortium said UK retailers had seen the slowest sales growth in December for three years, with sales up by just 0.3% year-on-year. |
| Talking to the BBC, M&S chief executive Sir Stuart Rose said the UK High Street "has definitely slowed up" and conditions in the clothing market were tougher than they had been for 10 years. | Talking to the BBC, M&S chief executive Sir Stuart Rose said the UK High Street "has definitely slowed up" and conditions in the clothing market were tougher than they had been for 10 years. |
| But he said that unlike other shops, M&S had not discounted heavily to shift its stock. | But he said that unlike other shops, M&S had not discounted heavily to shift its stock. |
| "We did not discount in the run-up to Christmas," Sir Stuart said, adding that stock levels were well controlled and the company had seen a strong start to the Christmas Sale. | "We did not discount in the run-up to Christmas," Sir Stuart said, adding that stock levels were well controlled and the company had seen a strong start to the Christmas Sale. |
| Marks hasn't yet resorted to the kind of savage price-discounting we are seeing from its rivals. So it has ammunition in reserve Robert Peston, BBC business editor class="" href="/1/hi/business/7178459.stm">Analysts' reactions class="" href="/1/hi/programmes/working_lunch/7176597.stm">Other retailers to suffer | |
| Website sales were particularly strong, adding 78% during the quarter. And in contrast to its poor results at home, M&S's international sales rose 15.1%. | Website sales were particularly strong, adding 78% during the quarter. And in contrast to its poor results at home, M&S's international sales rose 15.1%. |
| At the same time, certain sectors like food had improved their outlook. | At the same time, certain sectors like food had improved their outlook. |
| Pipeline | Pipeline |
| The BBC's Robert Peston said despite the latest results there were still reasons for hope. | The BBC's Robert Peston said despite the latest results there were still reasons for hope. |
| "Marks hasn't yet resorted to the kind of savage price-discounting we are seeing from its rivals. So it has ammunition in reserve". | "Marks hasn't yet resorted to the kind of savage price-discounting we are seeing from its rivals. So it has ammunition in reserve". |
| He added that it has the "best property portfolio on the high street" making it more resilient than most for a deteriorating economic climate. | He added that it has the "best property portfolio on the high street" making it more resilient than most for a deteriorating economic climate. |
| Looking ahead, the firm said its plan to update its stores had been applied to 70% of its shops adding that a "strong pipeline of new space for 2008 and beyond" was planned. | Looking ahead, the firm said its plan to update its stores had been applied to 70% of its shops adding that a "strong pipeline of new space for 2008 and beyond" was planned. |