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Last Updated: Sunday, 21 December, 2003, 15:19 GMT
M&S 'hit by weak Christmas sales'
M&S store front
UK retail giant Marks & Spencer has suffered a sharp drop in pre-Christmas clothing sales, press reports claim.

M&S' share of the UK clothing market fell by 3% over the autumn, the Sunday Telegraph reported, quoting figures from researchers Taylor Nelson Sofres.

According to the Mail on Sunday, M&S staff could miss out on lucrative bonuses after an on-year dip in clothing sales of up to 10%.

M&S refused to comment ahead of a trading update on 14 January.

The reports suggest that M&S may be on the brink of a fresh downturn just 18 months after pulling itself out of a disastrous sales slump that set in during the late 1990s.

Tough trading

Any cut in staff pay in the event of a renewed decline in sales would be shared at the highest level.

In July, M&S chairman Luc Vandevelde - the architect of the store's recovery from its late 90s slump - opted to be paid largely in M&S shares.

M&S shares, which have fallen by 16% since mid-July, are sure to decline further if the firm's own figures confirm that sales are in decline.

Analysts believe the retail sector as a whole may be set for a lacklustre Christmas season as consumers rein in spending following last month's interest rate rise, the first for nearly four years.

Earlier this month, official statistics showed that retail sales growth in November fell to its lowest level since July.

Last-minute rush

And three weeks ago, discount clothes retailer Matalan - formerly one of the sector's best-performing companies - issued a shock profit warning.

The store blamed weaker than expected sales of expensive items such as winter coats.

However, reports of a late surge in activity at the nation's shopping malls over the weekend helped dispel some of the gloom engulfing the sector.

The giant Bluewater shopping mall in Kent reported a big increase in shopper numbers, as did the Central Shopping Centre in Milton Keynes.


SEE ALSO:
Matalan spreads Christmas gloom
11 Dec 03  |  Business
Weakest retail sales since summer
18 Dec 03  |  Business
M&S sees profits rise
04 Nov 03  |  Business
Thongs join Y-fronts at M&S
29 Oct 03  |  Business
Heatwave dents M&S sales
07 Oct 03  |  Business
M&S boss opts for shares only
08 Jul 03  |  Business
M&S abandons pay cut plans
04 Jul 03  |  Business
M&S staff face pay cuts
25 Jun 03  |  Business


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