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BBC's Ann Scott
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Sunday, 19 December, 1999, 12:40 GMT
M&S 'slump' fuels bid talk

M&S Shoppers say M&S's ranges have failed to improve

High street giant Marks & Spencer is at the centre of fresh takeover speculation as observers believe it is suffering its worst ever Christmas.

Seasonal sales have slumped by 15% this year, says a newspaper report.

Last week, both Tesco and corporate raider Philip Green were reported to be considering takeover bids.

Marks & Spencer, once the nation's favourite food and clothing retailer, famous for the high quality of its products, has been falling in popularity for about two years.

The company's official Christmas trading figures will be unveiled in a trading statement in January. The Sunday Times says the statement could now include a profits warning.

M&S M&S could be a takeover target
But an M&S spokeswoman said: "We don't ever comment on trading before Christmas is over.

"Every Christmas is different and until you've seen the whole shape of sales, you cannot comment."

According to the report, sales of food at M&S are 2% ahead of last year, but clothing sales have plunged.

Last year, a string of bad news for the company ended in a 41% drop in profits. It was followed by a 44% fall in its six-month results unveiled last month, to 192.8m.

Analysts are forecasting that profits for the year to March 2000 could slide still further.

Any potential bidder is likely to wait for the company's official Christmas trading statement before making a move.

Shares in the company have been on a rollercoaster ride over the last week amid rumours that potential buyers were lining up.

Mr Green, who earlier this year took over and broke up the Sears group, said M&S was one of a number of companies he was considering.

But he said any deal would involve running M&S as a business rather than breaking it up for a sell-off.

City analysts believe a successful takeover bid for M&S would have to value the group at about 10bn.

During the year, company chiefs have unveiled a series of measures aimed at reviving the group's fortunes, including plans to accept credit cards.

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See also:
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Marks and Spencer - Your views and suggestions

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