M&S boss curbs overseas operations as first half disappoints

Mr Rowe also has a new five-year plan to improve productivity - and hopefully sales - across the UK stores. It will affect 25 per cent of the existing clothing and home estate, and ultimately result in fewer of these stores and an increased number of M&S Food sites. During the first half, food sales grew by 4 per cent compared with a 5.3 per cent decline in clothing and home, at constant currencies. This won't come cheap, however, with the restructuring costs estimated at £50m a year for the first three years, rising to £100m in years four and five. This is in addition to the previously announced restructuring of the group's head office, which will see up to 525 people lose their jobs.

Mr Rowe's plan initially went down well with the market, as investors sent the shares up marginally in early trading, before heading south. Shareholders were likely encouraged by Mr Rowe's fearless approach to turning the company's strategy on its head, as well as the fact that weather conditions in October and November have normalised, leading some to suspect clothing sales may have picked up in the past few weeks. There are also timid signs of recovery in the clothing and home division already. Having worked closely on restoring full-price sales, the group says its also seen some volume improvement, while gross margins squeaked out a 10 basis point rise to 56.7 per cent in the first half.

Analysts at Peel Hunt expect pre-tax profit of £612m for the year ending March 2017, giving EPS of 32p (from £684m and 34.8p in FY2016).