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U.K. retailer marked down
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November 3, 1998: 6:44 a.m. ET
Marks & Spencer profits drop by a quarter, shares plunge
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LONDON (CNNfn) - Marks & Spencer, often viewed as the U.K.'s most successful retailer, stunned the stock market Tuesday when it announced that half-year profits plunged by a quarter.
Analysts had been revising down forecasts in recent months, but the scale of the decline in the retailer's profits took the City by surprise.
M&S shares tumbled 9 percent when trading began Tuesday.
Comments that October trading had been "very difficult", and the group's difficulty in predicting how it will fare over the crucial Christmas period hammered sentiment towards the whole retail sector.
Department stores group Debenhams slipped 3 percent, and fashion retailer Next dropped 4 percent.
Pre-tax profits before one-time items slumped to £348 million ($574 million) in the six months through September, against £452 million last year.
The group's outspoken chairman and chief executive Sir Richard Greenbury has recently lashed out at criticisms of the company, but in a statement to the press Tuesday he held little hope for a rapid improvement.
He blamed the shortfall on a "setback to our overseas profits, the investment program in new footage and essential infrastructure improvements."
Greenbury also said the U.K was clearly showing a decline in consumer confidence, and he noted little hope of a rapid upturn in Asian markets.
He warned the U.S. economy was slowing, with negative consequences for Brooks Brothers, M&S' upscale menswear stores.
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Marks & Spencer
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