Booming sales for resurgent M&S

The resurgence of Marks & Spencer will be sealed today when the high-street giant reports booming Christmas sales.

Analysts are forecasting M&S to deliver its sixth consecutive quarter of growth under chief executive Stuart Rose, with food and clothes flying off the shelves during the festive season.

The performance could tempt Mr Rose into declaring that M&S has made a full recovery after previously refusing to use what he calls “the R-word”, insisting Christmas trading was the key barometer of success.

M&S posted a 32.2% rise in pre-tax profits to £405.1m (€603.6m) for the six months to September 30, its best result for a decade, which left some analysts predicting full-year profits of more than £1bn (€1.5bn).

Despite the sparkling performance, Mr Rose immediately insisted that as a retailer “you never get to where you want to go” and said Christmas was vital.

“If we have a good Christmas then we can say we are in the next stage of the journey,” he said in November.

Analysts believe M&S was one of the best-performing stores on the high street during a difficult Christmas that led to profits warnings for the likes of HMV.

Barclays Wealth is expecting like-for-like growth to come in just short of 9% at the M&S general merchandise division, while food should show growth of around 3%.

Others are equally upbeat, with Evolution Securities seeing general merchandise like-for-like growth of 7% and food up by a bumper 9.5%.

M&S last made profits of more than £1bn (€1.5bn) in 1997 and 1998 but the figure dived to as low as £145.5m (€216.8m) in 2001 as customers were put off by dreary clothes and depressing stores.

However, M&S shares have surged since September 2005 to a record high this month as investors welcomed the return to form and anticipated more positive news today.

Much of the recent success has been put down to award-winning advertisements, which feature 1960s fashion icon Twiggy and friends for womenswear.

The campaign with the voiceover “this is not just food, this is M&S food” has also been successful in attracting shoppers.