M&S shake-up may lead to sale of US interests

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The Independent Online
MARKS & SPENCER has denied reports that it is seeking buyers for its US interests, Brooks Brothers clothing and Kings supermarket chain, whose futures are being considered as part of a major strategic review.

However, the possibility of a sale in the next few months has not been ruled out as M&S attempts to consolidate its business after a dramatic fall in profits over the last year.

"We absolutely deny we are in the process of selling Brooks Brothers and Kings but no area of the business is sacrosanct in the review," said a spokeswoman. "It could lead to anything from us opening new Brooks Brothers stores in London, through to selling off the business."

Last week the retailer's new chief executive, Peter Salsbury, told city analysts that the "potential and relevance" of the two chains would be examined. A decision on their future could be decided ahead of the announcement of the review results in June.

The acquisition of the Brooks Brothers chain in 1988 is considered one of M&S's biggest strategic mistakes.

Profits at the 191-store chain improved when it diversified from conservative menswear into women's clothing and accessories but although a combined sale of the two businesses could raise pounds 375m, that is still less than M&S paid for Brooks Brothers alone.

M&S has also dismissed speculation that it is about to call a halt to its expansion in Germany as premature, saying that it has just opened four stores there and is planning to open a further one in Frankfurt.

Retail analyst Richard Hyman of Verdict Research said the retailer's problems were not to do with a lack of capital.

"Clearly the halving of M&S profits is something the city isn't too happy about, but a sale would have little impact on its ability to refocus its business and get back to the levels of performance we are used to," he said.