Troubled high street chain Marks & Spencer has said that Christmas sales slumped 5.3% in the six weeks to 8 January.

The company, once the darling of the high street, has already issued two profit warnings.

The figures could make it more vulnerable to a future takeover - although they were not as bad of some predictions of up to a 15% drop in sales.

Clothing sales were particularly hard hit, falling by 8% as customers shunned its middle-market brand.

Marks & Spencer, the UK's largest clothing retailer, seems to have lost its way, and despite employing well-known designers to revive its brand, it has had little success with the public.

The troubles are bad news for the thousands of workers at Marks & Spencer's suppliers. Many of them have already lost their jobs as the company has switched to overseas manufacturers.

This year there has been an estimated 4,500 job losses at its traditional clothing suppliers.

John Wilson of the British Apparel and Textile Confederation told the BBC there had been a "malaise" on the High Street, with customers more discerning and selective than before, which was affecting many stores.

Reasons for optimism

The company says that net margins, or profits, are better than last year, and it has less stock left over.

Nevertheless, it has launched a major winter sale, and has invested heavily in advertising its brands.

Chief executive Peter Salsbury said the company had maintained careful and effective control of margins and markdowns during a difficult trading period.

"Our stock position is clean and provides us with a positive base for the Spring season," he said.

Last year M&S saw its profits slump from £1.16bn to £545m.

The sales decline seems to be slowing down, with overall sales dropping just 3% when taking into account the additional stores opened this year. Food sales were up by 1.2%, and home furnishings did well too.

The better-than-expected news saw shares in M&S rise 4.6% to 304p, as the City expressed relief that the company had not announced another profit warning.

Demonstration

Clothing workers whose jobs are due to be axed will demonstrate outside the company's London head office later on Wednesday.

The GMB union will hand in applications from workers for the vacant job of chairman and will display a huge cardboard "wall" containing the names of thousands of people facing redundancy.

Des Farrell, the union's national officer for clothing, said: "For too long M&S has been running itself to please the City and its predictions. The company is highly viable and successful and there is no need for these foolish redundancies to take place."

One ex-M&S supplier, William Baird, announced on Tuesday it planned to sue the store for £53.6m for breach of contract, after it was dumped following a 30-year relationship.

Baird claims it is facing redundancy payments of £33m and further losses as it writes off the value of assets previously used to fulfil M&S orders.

M&S said it would fight any court action and that its legal advisers had said Baird's case had "no merit".