M&S sells financial services operation

M&S has struck a deal with banking giant HSBC to sell its financial services operation for £762m (€1.1bn), but will remain a partner and take a 50% share of future profits.

Proceeds from the disposal of M&S Money, which has 2.7 million cardholders and total lending of £2.5bn (€3.7bn), will form part £2.3bn (€3.4bn), which M&S boss Sturat Rose annuonced would be returned to shareholders.

The moves are part of an ambitious restructuring plan for the retailer, which Rose has billed "a return to retail".

M&S announced that 650 staff would lose their jobs as part of moves to generate annual savings of £320m (€479.5m) within three years.

Deals with suppliers have been renegotiated at lower costs, while the retailer has eliminated 500 food ranges and pledged to lower the number of products being marked down for sale.

Customers will notice the first changes in September when a new advertising campaign begins and gaps in store ranges are closed, Rose said.

The roll-out of Simply Food stores has also been stalled.

Shares fell 4p to 364p in the wake of the announcement, reflecting the possibility that billionaire takeover bidder Philip Green may now walk away.