Marks & Spencer shoppers. Photograph: David Sillitoe
Today's news from Marks & Spencer could have been worse. True, profits at the company that was once top dog on Britain's high street dropped 19% last year to £618.5m. But there was no profit warning to follow January's, so the company's share price enjoyed a 1.6% bounce to 342.25p.
M&S did not provide information on sales figures since April 2, the start of its financial year, which is what investors and analysts really wanted know about. However, Stuart Rose, who was appointed chief executive nearly a year ago, dismissed as "wild" media reports suggesting the sales decline was spiralling towards 10%.
This is the big problem for Mr Rose, who spoke to the press in a £124 M&S suit that included matching pink socks and silk tie. He can cut costs through job reductions and improve purchasing terms with suppliers, but unless he can bring back shoppers to M&S he is on a hiding to nothing.
M&S is losing business in clothes - the company remains Britain's biggest clothes retailer - to smaller fashion retailers such as Next and Topshop as well as supermarkets such as Tesco and Asda. The supermarkets are also providing stiff competition in high quality groceries, so M&S is under pressure on all fronts.
The decline at M&S began in 1998 when profits plummeted. Under its former chairman, Luc Vandervelde, there were some signs of recovery. But it soon ran out of steam and now it is the turn of Paul Myners as chairman and Mr Rose as chief executive to try to put things right.
But the timing could not be worse for the new team. They are trying to fix M&S at a time when consumers have curbed their spending big time. As a result one retailer after another is moaning about the "difficult" or "challenging" retail climate. If Mr Vandervelde and his chief executive Roger Holmes found it so hard to steer M&S towards recovery, it will be all the tougher for the present team.
In fact, some analysts believe that M&S is an incurable case. "It is about size of stores, location and a dramatic increase in competition. M&S has had its day," Philip Dorgan, a retail analyst at Lazards, told the Observer.
M&S is aware of the problem. It is seeking new outlets and will be testing its Simply Food products in eight petrol station forecourts run by oil giant BP this autumn. The test stores will offer ranges including fresh food, ready meals, flowers and basic groceries. But it all seems too little, too late.
