M&S shares rise as retailer reports better margins

Marks & Spencer yesterday raised its annual forecast for margins in clothing and homewares even though quarterly sales fell in this troubled division.

The group also beat forecasts for first-half profit and increased its dividend, sending its shares up almost 4% at one stage.

The performance is likely to give a boost to chief executive Marc Bolland who, rather than chasing unprofitable sales has focused on gross margins, the difference between the price M&S pays for goods and the price it sells them, through improvements in sourcing operations.