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| Version 2 | Version 3 |
|---|---|
| Sales gloom sees M&S shares dive | Sales gloom sees M&S shares dive |
| (10 minutes later) | |
| Marks and Spencer shares have fallen by more than 20% in early trading after it warned that a slide in consumer confidence had hit sales. | |
| Underlying UK sales dropped 5.3% in the past three months with its food business - which focuses on top end goods - being badly hit. | Underlying UK sales dropped 5.3% in the past three months with its food business - which focuses on top end goods - being badly hit. |
| The director of its food business is leaving the firm immediately as part of a management reshuffle. | The director of its food business is leaving the firm immediately as part of a management reshuffle. |
| The news saw shares in other retailers, such as Next, also fall sharply. | The news saw shares in other retailers, such as Next, also fall sharply. |
| M&S said that general merchandise sales had lost ground - but were in-line with the downturn seen by competitors. | M&S said that general merchandise sales had lost ground - but were in-line with the downturn seen by competitors. |
| By 0830 BST, shares were down 21%, 68p to 250p. | |
| Seymour Pierce analyst Freddie George said that it was inevitable there would be worries about the firm's position. | |
| "After these figures, concerns will grow (over) the strategy on food and therefurbishment programme, and the high debt levels of the group," he said. | |
| 'Change' | 'Change' |
| The iconic High Street retailer had already expressed caution about consumer sentiment in May, when it said there had been a "mixed" start to its 2008/9 financial year. | |
| But chairman Sir Stuart Rose said that since then, "consumer confidence levels have deteriorated markedly and market conditions have become more challenging". | But chairman Sir Stuart Rose said that since then, "consumer confidence levels have deteriorated markedly and market conditions have become more challenging". |
| But he added: "Four years ago, M&S was a weak business in a strong market. Today, we are a strong business in a weak market." | But he added: "Four years ago, M&S was a weak business in a strong market. Today, we are a strong business in a weak market." |
| M&S said like-for-like sales - which strip out the impact of store openings and closures - were down 5.3% in the UK in the 13 weeks to 28 June. | M&S said like-for-like sales - which strip out the impact of store openings and closures - were down 5.3% in the UK in the 13 weeks to 28 June. |
| Like-for-like food sales were down 4.5%, while general merchandise sales fell 6.2%. | Like-for-like food sales were down 4.5%, while general merchandise sales fell 6.2%. |
| M&S has become renowned for its "Simply Food" products - which are marketed as fresh and high quality but are more expensive than some other stores. | M&S has become renowned for its "Simply Food" products - which are marketed as fresh and high quality but are more expensive than some other stores. |
| "Pressures on consumer spending and increased competitor pricing and promotional activity, coupled with changes in consumer buying patterns, have resulted in a significantly weaker performance," Sir Stuart said. | "Pressures on consumer spending and increased competitor pricing and promotional activity, coupled with changes in consumer buying patterns, have resulted in a significantly weaker performance," Sir Stuart said. |
| "In order to meet these challenging market conditions, we need to increase the pace of change on a number of operating and trading initiatives" | "In order to meet these challenging market conditions, we need to increase the pace of change on a number of operating and trading initiatives" |
| This means the director of food, Steven Esom, is stepping down immediately, and will be replaced by John Dixon, the boss of M&S Home and delivery business M&S Direct. | This means the director of food, Steven Esom, is stepping down immediately, and will be replaced by John Dixon, the boss of M&S Home and delivery business M&S Direct. |
| Last month, M&S gave a hint of the tough High Street environment, lowering the profits the firm has to make for directors to earn bonuses. | Last month, M&S gave a hint of the tough High Street environment, lowering the profits the firm has to make for directors to earn bonuses. |
| M&S profits for the year to the end of March 2009 are expected to be well below the £1bn recorded in the previous year. | M&S profits for the year to the end of March 2009 are expected to be well below the £1bn recorded in the previous year. |