M&S to open out-of-town stores

Marks & Spencer was today said to preparing to open dozens of out-of-town stores as part of its continuing recovery programme.

The Sunday Telegraph said the high street giant will announce the first significant shake-up of its store portfolio for almost a decade when it delivers first-half results on Tuesday.

Read more...

M&S celebrates 35 per cent profits rise

It is said to include the relocation of underperforming town centre stores as well as a move out-of-town over the next five years.

The programme is the latest part of the M&S recovery plan under chief executive Stuart Rose, who was parachuted into the hot seat in 2004 to fend off a £9 billion takeover bid from Sir Philip Green.

Shares in M&S have risen from 413p to 656.5p in the last 12 months as customers returned to the stores following years of falling sales and profits.

M&S is expected to post a massive rise in pre-tax profits on Tuesday from £308.2 million in the six months to September 30 last year to between £402 million and £414 million this time around.

The dramatic rise forecast by analysts follows strong sales growth in both food and clothes as M&S benefits from store refurbishment and a high-profile marketing campaign featuring 1960s fashion icon Twiggy.

Jeremy Batstone, of Charles Stanley Stockbrokers, said: "We look for general merchandise like-for-like sales growth of 6.5 per cent and the increasingly important food business, which is benefiting from a significant increase in space, to deliver like-for-like growth of about 5.2 per cent."

M&S chief executive Stuart Rose has so far been reluctant to use the word "recovery" to describe the turnaround at the firm.

He has insisted that M&S must deliver a strong performance over the key Christmas trading period amid fierce competition from the likes of Primark and Topshop and the supermarkets.

And Mr Batstone said M&S "has its work cut out" in the run up to Christmas, especially with an expected increase in interest rates later in the week further damaging consumer spending.

Mr Batstone said: "Given the competitive nature of the operating environment and a likely rate hike shortly after these results, the battle for the consumer pound is likely to be very aggressive this year."

A strong performance is likely to be well received in the City, particularly after disappointing figures from Debenhams, which last month reported flat sales.

The Arcadia empire run by Sir Philip - which includes Topshop, Miss Selfridge, Burton and Dorothy Perkins - also failed to overcome difficulties on the high street with a profits down by a fifth.

However, investors and analysts will also be interested in plans to open out-of-town M&S stores.

The last major strategic shake-up of the M&S property portfolio came in 1999 when then chief executive Peter Salsbury sold off a number of freeholds.