Marks and Spencer adds to retailer woes

The High Street has suffered recently due to consumers cutting back on spending and Marks and Spencer (M&S) is the latest retailer to add to the misery.

Britain’s largest clothing retailer said UK like-for-like sales had declined 6.1% in the 13 weeks to 27 September, compared with a fall of 5% in the previous quarter. Like-for-like general merchandise sales (which includes clothing) were down 6.4%, while food sales were down 5.9%.

Sir Stuart Rose, executive chairman, said consumer confidence remained fragile and the retail environment was unpredictable.

He added that the current financial turmoil added to the difficulties that all retailers face and the fact that people are worried about where their money is and the security of their savings, is bound to have an impact on consumer confidence.

The group said it plans to sacrifice some margin within its food business to help consumers, adding that M&S will not compromise on quality.

This year, capital expenditure is now expected to be around £700 million, revised from a pervious forecast of £800-£900 million. The group plans to reduce the amount it spent on improving its stores, added Sir Stuart.

Sir Stuart believes an interest rate cut next week would give a much needed confidence boost.

However, despite the fall in sales, shares in the retailer were up almost 10% at one point after the news of cost cuts were welcomed by analysts, who said sales were in line with expectations.

The retailing industry has suffered this week after Hardy Amies, the Savile Row tailor and former dressmaker to the Queen, confirmed it is to call in the administrators after a rescue finance package failed.

Meanwhile, Sixty UK, the company that runs both the Miss Sixty and Energie fashion labels, has put its retail stores into administration.

Clothing and homeware chain Joy, and furnishings and curtain chain, Rosebys, were both been placed into administration earlier this week, while furniture giant MFI was rescued from the brink of collapse by a management buyout.

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