British retailer Marks and Spencer has reported a 5.3% fall in first-quarter UK underlying sales, and said the head of its food business was leaving with immediate effect. The news sent its shares down almost 25% in London.
The clothes, homewares and foods retailer said in a trading update brought forward by a week that it expected market conditions to remain challenging and that it was difficult to predict future gross margins, a key measure of profitability.
'At our preliminary results in May, we reported a mixed start to our 2008/9 financial year and expressed caution about consumer sentiment,' Chairman Stuart Rose said.
'Since then, consumer confidence levels have deteriorated markedly and market conditions have become more challenging,' he added.
Marks and Spencer said like-for-like general merchandise sales fell 6.2% in the 13 weeks to June 28, but that it was holding market share in clothing and outperforming in homewares.
However food like-for-like sales were down 4.5%, a 'significantly weaker performance,' and the head of the division, Steven Esom, was leaving with immediate effect, it said.
He will be replaced by John Dixon, currently the head of the group's Home and M&S Direct businesses.
