M&S denies Brooks sale

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The Independent Online
Marks & Spencer yesterday denied it was considering selling its Brooks Brothers clothing stores in America, though some City analysts say they regard the sale as inevitable.

"It's an open secret that Sir Richard Greenbury [the M&S chairman] wants to sell Brooks," said Nathan Cockrell, a retail analyst at NatWest Securities. He said the company had hinted over the past year that Brooks Brothers would be sold as Sir Richard prepared to hand over control of Marks & Spencer upon his retirement in 1999. It is understood that in meetings with analysts Sir Richard has described Brooks as "non-core" and "not a business he planned to leave to his successor".

These suggestions were strenuously denied by M&S yesterday. "We have absolutely no intention of selling Brooks Brothers," a spokeswoman said. "I don't know where these rumours are coming from. It is starting to turn the corner."

Speculation regarding a Brooks Brothers deal grew on talk that M&S is planning a review of its dividend policy. Analysts believe this could involve the sale of Brooks Brothers with the proceeds used to pay a special dividend. M&S's finance director, Jeff Denton, denied any change to dividend policy was planned. However, the company has been holding meetings with analysts this week and a profits upgrade by SBC Warburg fuelled talk of a Brooks Brothers disposal.

Although the bank would not reveal the reason for its upgrade, a spokesman said "various things" had been said that had left the Warburg team "relatively bullish".