M&S sees profits dive

Half-year profits at Marks and Spencer have fallen 34% as the weakening economy has hit consumer confidence. The retailer said pre-tax profit stood at £297.8m in the first half of the financial year, down from £451.8m a year earlier. Clothing sales fell more than 5% during the period. M&S boss Sir Stuart Rose said trade had been volatile in October and he was cautious about the rest of the year given the recent financial crisis. "Customers are increasingly concerned about value and we know that we have to respond accordingly," he said.

"The economic environment has changed dramatically and we are now facing the most difficult retail conditions since the early 1990s," Sir Stuart said. UK sales in stores open more than a year were down 5.7% during the period, with general merchandise down 6.2% and food down 5.3%.The fall in profit was less than some analysts had expected, boosting M&S's share price. It closed up 7.6%, or 16.75 pence, at 238.25p.

The firm also said it was strengthening its clothing range by launching a new brand next year for women aged over 45.

M&S is facing competition from low-cost rivals like Primark, which said on Tuesday that its like-for-like sales had risen 4% in the year ending September 13.

Image: M&S Sir Stuart Rose