Marks & Spencer retreats from the high street in £1bn shake-up

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The Independent Online

Stuart Rose will shift Marks & Spencer's focus away from the high street to out-of-town retail parks this week as he presides over a further slide in sales.

Stuart Rose will shift Marks & Spencer's focus away from the high street to out-of-town retail parks this week as he presides over a further slide in sales.

M&S's chief executive will announce the strategy shift at Tuesday's full-year results. The retailer refused to divulge details ahead of the numbers, but an insider said: "Certainly, during the course of the next year, there will be new stores opening."

Some high-street shops selling fashion and food will be closed or sold as a result, although Mr Rose believes there is still room to grow the 400-strong estate, despite the current slump in town centres.

Mr Rose is also likely to reveal plans to expand the Simply Food stores - there are currently 130 - and to announce a partial roll-out of a trial refurbishment programme in the clothes-and-food outlets. Four stores have been revamped over the past 12 months, and another six opened under the new format, which includes better signposting and a more coherent organisation of the fashion ranges. Analysts expect that the overhaul of the estate could cost up to £1bn in total.

However, as well as Mr Rose's recovery plans, the results will concentrate heavily on current trading. One analyst said a slide of 3 per cent "would be good", but expected it to be closer to minus 6 per cent. Others were more downbeat, and warned it could fall by as much as 10 per cent.

M&S does not give updates on trading at results; a formal update is scheduled for the annual general meeting on 13 July. But it is understood that it is expecting to answer detailed questions from concerned analysts.

Mr Rose is struggling to turn M&S round against a background of slower consumer spending, price deflation and stiff competition. A report last week by Verdict Research said Tesco is now selling more non-food goods than M&S.

But one issue that is now settled is the boardroom spat over interim chairman Paul Myners. A compromise deal was brokered when Abbey National's chairman, Lord Burns, agreed to become deputy to Mr Myners in October before taking over in 2006.

Mr Myners was said to be happy with the arrangement but remained critical of the senior independent director, Kevin Lomax, who was believed to feel that Mr Myners was too close to Mr Rose.

Lord Burns said he was confident rifts could be healed. "It's a great company and it matters to a lot of people. My main concern was that it was possible for the board to move on and I'm satisfied about that."

Lord Burns added he would also assess his other roles and decide if he needed to drop any.

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