Outlook: Marks & Spencer

MARKS & Spencer has at last clarified its strategy in the US with confirmation of plans to sell its Kings supermarkets but expand its Brooks Brothers operation. This is a piece of housekeeping the stock market has been long looking for.

The decision also adds to the growing list of changes made by Peter Salsbury, in the chief executive's chair for only nine months so far. In that time he has re-shaped the board (ie sacked three colleagues), axed management staff at Baker Street and store level, put more sales people on the shop floor, created a marketing department, pulled out of Canada and closed some poorly performing stores in Germany and France. Then there is the makeover for the top stores, an e-commerce launch in the autumn, etc, etc.

Will it be enough to turn the St Michael supertanker round? Certainly he looks to be in with a better chance than that other fallen retail idol, Sainsbury's. While Sainsbury's faces two ruthless competitors in Tesco and Asda, M&S faces a more fragmented challenge on several fronts. Its brand is still pre-eminent, and its market share in key sectors the envy of rivals.

This is not to say that there is not still more downside in the share price. Trading in many stores is still awful and a prolonged cold-snap may be needed to kick start the much-vaunted autumn clothing ranges. While Mr Salsbury has hardly been idle, key problems still need addressing. Some say that Baker Street has become overrun by management consultants and that senior managers have lost confidence in their own beliefs.

In other words, things could get worse before they get better, but if you had to pick a recovery story out of Sainsbury's and Marks & Spencer, it would be the latter.