M&S chief tells investors retailer 'is no basket case'

Stuart Rose, the chief executive of Marks & Spencer, said yesterday the flagging high street retailer would come out fighting for this year's Christmas period, saying the business was not the "basket case" its critics believed.

Stuart Rose, the chief executive of Marks & Spencer, said yesterday the flagging high street retailer would come out fighting for this year's Christmas period, saying the business was not the "basket case" its critics believed.

Speaking shortly after a meeting to approve returning up to £2.3bn to shareholders, Mr Rose said: "Marks & Spencer is not a basket case. It is making a good level of profits. We just have to accelerate it further, taking the best things from its past and moving them into the future. It has a great brand and great products."

He said that he has spent most of his time since joining the company on the shop floor, and promised customers a better Christmas offering this year. He said: "We will look much better this Christmas. The stores will have better products, will look tidier and will have more staff to deliver a better service."

He claimed to have already made significant changes to help trading improve, such as managing its supply chain better to beef up stocks of popular items and take slow-selling goods off the shelves.

Mr Rose's comments came a day after Philip Green, the billionaire retail entrepreneur who offered £9.1bn for M&S in the summer, revealed operating profits at his fashion empire were up 30 per cent. Since rejecting the offer, M&S has announced poor trading results.

Shareholders voted overwhelmingly in favour of the £2.3bn tender offer, which Paul Myners, the chairman of M&S, said was "part of a plan to restore the company's fortunes". Mr Myners, who was acting chairman while fending off Mr Green's approach, thanked private shareholders for their loyalty throughout a difficult period.

Asked by one shareholder to comment on Mr Green and his success, Mr Myners said: "Mr Green has made a great deal of money for himself and for his bankers. It is my intention to make a great deal of money for Marks & Spencer's shareholders." He warned, however, that the company could not turn around its performance overnight.

M&S said last month that it would buy back about 29 per cent of its shares at between 332p and 380p. The final price of the buy-back will be set next week and will be calculated on the amount of shares offered up for sale. If it does not achieve the return of £2.3bn, Mr Myners said the company would explore alternative measures to return the cash.

He defended the tender price range, which is below Mr Green's offer. Mr Myners said: "A potential offer for all of the company's shares is one thing. A move to repurchase a significant proportion of equity, leaving the rest in your hands, is entirely different. In the former, shareholders should receive a substantial premium for giving up control. In the latter, the board must be mindful not to transfer value from continuing holders to exiting shareholders."

Shares closed up 1.6 per cent at 357p. Most analysts say the strike price for the offer will be about 360p.