M&S shares fall on disappointing sales figures

MARKS & SPENCER shares fell heavily yesterday after the retailer reported disappointing fourth-quarter sales figures.

The retailer said sales in the 11 weeks to March 29 rose by just 1% on a like-for-like basis. Clothing sales were particularly weak, down 0.3%, despite the launch of new ranges and the much-hyped David Beckham children's collection. Strong food sales growth offset the weakness, but the company's share price took a pounding, down 4% on the day to 281p.

The company did not strip out separate sales figures for its Irish shops, but said its international businesses saw sales rise by just 1%.

Chief executive Roger Holmes said the Beckham range and schoolwear represented pockets of recovery for the store's troubled children's lines, which represent 10% of overall clothing sales. He said: "the areas of success that we have achieved so far in David Beckham DB07 and schoolwear gives us an indication of what we need to do to build a better recovery."

The group blamed weakening market conditions for the lower general sales, but said it had outperformed the market in food.

Mr Holmes said: "our general merchandise sales have been affected by weakening market conditions during the last quarter, but performance for the year overall has been satisfactory. In food, we have again delivered strong quarterly sales, outperforming the market."

The drop in the fourth quarter is a sharp contrast with the 8.8% growth seen in the third quarter when Mr Holmes predicted a

return to more normal growth of 3-5%. Analysts were not impressed with the figures, though, they said that the retail sector has been hit by

declining consumer confidence and increases in tax. "M&S looks a bit messy," said JP Morgan's Nigel Cobby.